The promise of being your own boss has Australians across the country eyeing up small business ownership, according to new data from SEEK Commercial.
Despite long working hours and a competitive business landscape, the liberating effects of working for yourself has seen demand for buying a small business skyrocket, outstripping supply 18 to 1.
SEEK data shows there are more than 260,000 small business buyers visiting the SEEK Commercial site each month to search through over 14,000 business and franchise opportunities.
Overall, visits to SEEK Commercial have grown 22 per cent in the last financial year. The supply is growing even further, with a 32 per cent year-on-year increase in businesses for sale listings.
What small business should you buy?
Businesses in hospitality and service, especially those serving coffee, have always been the most popular to buy, according to SEEK Commercial Product Manager, Ana Rowe.
“When looking at the most popular searches on the site, ‘coffee’ is the number one keyword, and Coffee, Cafes and Restaurants is the top category, accounting for 24 per cent of all category searches on SEEK Commercial, compared to 18 per cent just 18 months ago.”
“Food is also a very strong performer, both in terms of demand and number of businesses for sale. Mexican food is still hugely popular, while there are also new healthy food options coming into the mix as the national health craze continues,” Ana said.
However, trends can change within the sector quickly.
“There are more mobile and van franchises coming into the food and drink service arena at the moment, but this hasn’t always been the case.”
“These are popular investments as they’re cheaper to get into, they’re a great lifestyle choice and the quality of a mobile espresso or food can be of high,” she said.
These guys right here got it right
Bart and Jack White are one example of successful food truck owners. They run a number of food trucks in the Melbourne area, but specialise in desserts.
“Our first event was selling waffles at the Harvest Picnic at Hanging Rock. Our set up costs were around $3000, but we covered those in just one day. We haven’t looked back since,” Jack said.
Now they run The Brûlée Cart which they crowd funded using Pozible, and have diversified to also sell coffee and other French desserts.
“Running your own food truck can be stressful, but if you work hard the rewards are huge. We loved the idea of building a brand from scratch, which we wouldn’t have been able to do working for someone else.
“We’ve seen a real increase in the number of winter events happening, so we now have steady business right through the year. People are also more open to the idea of getting out of the house to eat street food, which has helped us increase revenue.
“It doesn’t come without its challenges. It’s an up and down business – one week you might sell a lot, the next week you lose a lot, so we like the challenge of choosing the right events and cooking the right quantities of stock to ensure the business is a success,” Jack said.
What else is hot right now?
Manufacturing, Wholesale & Distribution is the second most searched category in Australia, accounting for 13 per cent of all category searches.
Businesses in this category are varied and can include owning the license to distribute produce such as meat or poultry, through to distributing leisure products such as kayaks.
Ana said there were also seasonal spikes, suggesting buyers and sellers would have better luck at different times of the year. “We see the most traffic and activity on our site between January and March, while October and November are also very strong.”
“A lot of people treat the start of the year as an opportunity to reassess their career goals, optimism is high, and workers feel refreshed after summer breaks. They are more decisive and willing to chase their dream of a better lifestyle and being their own boss.”
SEEK Commercial’s top 5 tips for business buyers
- Evaluate yourself – consider your strengths and your abilities, but also think about your lifestyle, passions and confidence.
- Do your research – Is buying a business the best option for you, or would a franchise – where systems and processes are already in place – be more suitable?
- Do your due diligence – spend time reviewing financial documents and other paperwork, consider any legal and tax implications, and even any regulatory bodies if relevant.
SEEK Commercial’s top 3 tips for business sellers
- Don’t skimp on evaluation – It’s not as easy as it looks. Make sure you know what it’s really worth in the marketplace.
- Be pedantic when preparing your business for sale – Think about your audience. Do you know who your ideal buyer is and where to find them? Prepare the books, marketing material, and consider your staff and suppliers.
- Give it time – it takes on average six months to sell a business.