'Buy a Job' businesses losing popularity in Queensland
As wage growth improves across industries, the allure of the ‘buy a job’ business has waned in recent times in Queensland.
Typically, these types of small businesses, such as franchises, offer a range of benefits to the owner-operator such as an existing business infrastructure, customer base and brand recognition. Buyers can be their own boss with a modest capital investment, securing job security, stability and autonomy.
The proposition may be more susceptible to changes in the economy however, as reduced customer spending and increased operating costs make it challenging to stay afloat. This is reflected in recent data published by the Australian Financial Security Authority (AFSA) which shows that business related personal insolvencies are up 27% in the last quarter compared to last year.
Wage prices have increased 3.8% in the private sector in the last financial year, being the greatest increase in over a decade.
Tony Hancock, Chair of the REIQ Business Brokers Chapter Committee, provides insight:
"The bottom end of the market – the smaller businesses that are sometimes seen as a ‘buy a job’ proposition with a $150,000 profit or lower – has been affected," he says. "A strong job market with abundant well-paying jobs on offer have contributed to the loss of interest."
Are any businesses trying to sell because of stress?
Tony says businesses under stress tend to be those ‘buy a job’ style businesses who have let their business go to the point that they’re now under complete distress.
"They’re not able to look for a significant price, particularly if it’s a business not earning enough to make a stable wage," he says.
"So, unless a potential purchaser thinks they have encountered a bargain and has an entrepreneurial and risk mindset to make a go of it, it may become an asset sale.
"But these circumstances are the exception to the rule at the moment. I’m predicting we’ll see a buoyant business market for the rest of 2023. A lot of people looking to get into businesses are predicting an improving economy over the coming years."
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