Nearly two out of five small business owners want to sell their business, according to research commissioned by American Express as part of the Shop Small campaign.
Now in its third year in Australia, the Shop Small campaign aims to support small businesses and encourage consumers to support their local retailers.
As part of the campaign, a survey of more than 600 SME owners found one of the main reasons why entrepreneurs have an exit strategy is to ensure financial stability.
Just over 70% of small business owners reported financial stability as the reason why they intend to sell their business.
Meanwhile, 82% of SMEs said increasing costs were making it harder for them to remain self-employed.
And just because small business owners are looking to exit doesn’t mean they are keen to pass the reins to a family member.
Sixty-seven of the small business owners surveyed said they will most likely sell their business to individuals or businesses outside the family.
While the number of small businesses looking to move on might not be encouraging, there is some good news, according to the Economy of Shopping Small Report.
The majority of Australians believe small businesses are a vital part of the community.
More than 60% of Australians believe small businesses add to their local community’s charm, while 42% of Australians would continue to support their small, family-run business even with a 10% price increase across the board.
Small business minister Kelly O’Dwyer said small businesses are the “heart” of the economy and consumers are ready to step up to support them.
“Small businesses account for four in every ten jobs, contribute over $340 billion of economic output and employ more than 4.5 million Australians,” O’Dwyer said.
“Without small business in Australia, half of the private sector workforce could find themselves unemployed and our local shopping villages would have a distinct lack of character.
“As consumers, it’s our job to step up and show support to the small businesses which give us so much, because they are the heart of our community.”
Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany he is not too worried by the two out of five figure because some industries, such as the IT sector, by their very nature involve starting up a company with the ultimate goal of selling it for millions of dollars.
“But then you get others like hairdressing where they’re there for a year and decide to move on, or others are there forever,” Strong says.
“The other interesting thing is some businesses never sell. If you’re a builder and you work for yourself, you don’t sell that – you just go work for someone else. So it’s different across different industries… the figures aren’t too disturbing.”
Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University’s student magazine Catalyst.
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