Written by: Harvey Weyman-Jones from Weyman Jones Business Brokers & Valuers

Buyers More Active

The Sunshine Coast is experiencing increased demand from buyers and a shortage of supply of quality businesses. Our beautiful lifestyle region is attracting migrants from other parts of Queensland, interstate and internationally. These financially secure migrants are looking for a reliable business to purchase. Also, the pre-existing “vulture” buyers have realised that they have missed the “dead meat” opportunities and they are also more active and more realistic in their attitude.

Buyers have become more optimistic about the future economy, but they are still being partly held back by the banks with their tight lending criteria.

Seller Finance

To get around the lack of finance from banks, we have managed to put together several deals involving seller finance. The buyer pays an initial payment (greater than 50%) on settlement and the remainder over one to two years. The ongoing payments can be based on future performance or fixed amounts - monthly, quarterly or six-monthly, with or without interest, depending on the deal as a whole.

Shortage of Quality Listings

There is a distinct shortage of quality listings on the market at the moment. This always happens at this time of year, because prospective sellers think that they should wait until after the end of the financial year to get their accounts done.  Traditionally there is an increase in listings in August and September.

Sell Now May to July

Our advice is to sell now while there is less on the market.

Businesses should be able to produce accounts for nine months to the end of March. We should then be able to fairly and accurately predict the 2009/10 annual performance from the nine month figures. If you are thinking of selling, market now - don't wait for the year end accounts.

Seller Numbers to Increase

This is a reminder of our predictions from a couple of issues ago that there is a flood of sellers due to hit the business sales market in about five years' time. Baby boomers are retiring and demographics show that numbers will steadily increase to peak between five and ten years time.

Our advice is to consider your options carefully, and if you can afford to retire comfortably, sell sooner rather than later. There is not likely to be a huge wave of sellers but more likely to be an ever increasing flow.

We know that the market is good at the moment based on the expectations that the economy is improving. Reality may be different in one or two or three years' time.