In November 2021 Platform 1 conducted a market survey titled: Attitudes To Entering Business Ownership Following Covid 19.

Data from this survey of potential future business acquirers shows that despite the pandemic, there is still not enough scalable businesses available. Over 65% of all respondents mentioned that they were finding it hard to find a scalable business with growth opportunities. This increased to 77% when measured only against those exclusively looking for a business. They also mentioned that many of the businesses available were too small.

When questioned on whether the pandemic was impacting their decision to buy into a business, only 38% said it had made them reconsider.

When asked whether buying into a business gradually would interest them more than an outright purchase, 65% said yes, while 32% said both options would suit them. The remaining 3% said no or not applicable.

Platform 1 Director Mike Warmington said “One of the more common questions we get from people looking at opportunities, is that scalable businesses are in short supply. People leaving a successful corporate career are wanting to apply their skills to innovate and grow a business, often using technology as an enabler. They are not looking to simply replace their salary.”

The open rate on opportunity emails to the Platform 1 potential acquirer database has increased from 33% to 40% from June to October 2021. Click through rates have nearly tripled, reinforcing the strong interest from prospective business owners in looking for “skin in the game”. It could well be the perfect time for owners to exit while the talent pool of entrepreneurs is available.

At the same time there has been a noticeable lift in interest from business owners looking at exit strategies. Many baby boomer owners are simply over this environment and “Covid Fatigue” has set in. Platform 1’s newly engaged client numbers have more than doubled in the second half of 2021, compared to the first half of the year, despite lockdowns.

Mike Warmington stated “Some owners were ready last year and delayed their plans for a perceived better time. It’s now nineteen months later and there is a realisation that they need to get on with it so they have come back to us. “

While there has been talk for ten years or more of the tsunami of business owners looking to exit, we still have not seen the rush. The reasons to wait are decreasing and we expect the current elevated activity in the business exit space to dramatically increase in 2022.

Media contact for more information:
Mike Warmington – Director, Platform 1 NZ Ltd
(T) +64 211874873
(E) mikewarmington@platform1.co.nz
(W) www.platform1.co.nz

About Platform 1

Platform 1 are the market leaders in Business Owner Transition and work with private business owners requiring succession. They specialise in finding people with capability and capital who gradually transition into a business, buying the owner out over time. This can be a partial or full buyout. They work with businesses within the $2M to $20M turnover region across New Zealand.

MIL OSI

After a turbulent 18 months for business owners, business owner transition company Platform 1 have found owners facing succession are starting now to think about moving forward. We know now that Covid will have some impact on lives and businesses for some time to come, so will there be an acceleration of business owners exiting?

A recent June Platform 1 business owner survey found there was a decrease in business owners thinking of delaying their exit compared to the same survey conducted after the first lockdown in 2020. This was from 25% down to 17%. “This is consistent with the noticeable increased level of activity we are experiencing from business owners facing this challenge” said Platform 1 Director Mike Warmington.

To some extent lockdown has given business owners more time to think about their business and work on it. One respondent from the anonymous survey said, “Given me a lot more time to think about a correct succession plan that suits my style of business”.

Less business owners now believe it would be more difficult to find a buyer with a reduction from 41% in 2020 to 23% in 2021 shown in the surveys.

Lockdowns over the last 18 months have also set back the plans of incoming entrepreneurs looking for a business. Platform 1 are experiencing stronger demand from people looking to gradually transition into a business. “This has resulted in people with a strong skillset and capital missing out through in a competitive process for limited opportunities. Many of these people have been resident in New Zealand for some time and not recent returnees “said Platform 1 Director Mike Warmington.

The last 18 months have caused a backlog of business owners not exiting their quality established businesses as planned. Some felt in 2020 that they should build back up their businesses or that the time was not right for incoming buyers. Few would have expected that the pandemic would still cause lockdowns late in 2021 and are worn down from it. “Platform 1 expects an acceleration of business owners looking to exit over the next 12 months which could put pressure on the available pool of people. The last quarter of 2021 will be a great time for owners that have been delaying their exit to start the process and access the available people.” said Platform 1 Director Mike Warmington.

About Platform 1

Platform 1 are the market leaders in Business Owner Transition and works with private business owners requiring succession. They specialise in finding people with capability and capital who gradually transition into a business, buying the owner out over time. This can be a partial or full buyout.They work with businesses within the $2M to $20M turnover region across New Zealand.

Media contact for more information:

Mike Warmington – Director, Platform 1 NZ Ltd
(T) +64 211874873
(E) mikewarmington@platform1.co.nz
(W) www.platform1.co.nz

MIL OSI