As Listings Rise, Simon Bedard Shares His Vision to Strengthen Australian Business
As Listings Rise, Simon Bedard Shares His Vision to Strengthen Australian Business
Simon Bedard, the NSW Chair of the Australian Institute of Business Brokers (AIBB), nominated a desire for consistency as the driving force behind business sentiment.
“What businesses really want right now is consistency and stability. Chopping and changing governments and tearing up previous policies so you can appear different is counter- productive!” he started.
He continued, “Over the last 6 months we have heard a lot about interest rates, followed by elections in the US and Australia, and since then the tariffs and trade wars. Most business owners want to move past the noise, and get on with business.”
Current Business Environment
Simon has noted a significant increase in business listings over the last few months as overall sentiment has improved. He attributes that to three factors:
1. Interest rates are trending down.
Although Simon agrees that interest rates do not affect business sales significantly, they do affect general economic activity, which creates a positive basis for all businesses. Improved business prospects help support business valuations, making it more attractive for vendors.
2. Baby boomers are selling (at last!).
“We’ve been talking about baby boomers retiring for ages. The silver wave of businesses coming to the market, which really didn’t happen. They are living longer, they are healthy, and they don’t know what they want to do if they sell. But, finally, that is starting to change, and we are seeing an increase in those vendors,” he explained.
3. COVID hangover.
“Businesses badly affected by the COVID lockdowns are now able to show a history of financial results in a post-COVID world, so that pent-up supply is coming through too,” Simon concluded.
And, for buyers, Simon is also positive. “I think there’s an enormous amount of capital out there looking for a home. I also think there are an enormous number of 30 to 40-year- olds who are disillusioned with the corporate world and are interested in going into business.”
Simon explained, “I’m seeing a rise in ‘Search Funders’ (would-be entrepreneurs who work with investors to buy privately held businesses). The arrangements vary, but typically the search funder operates the business and, at the end of an agreed term, earn a stake in the business. This has been common in the US for a long time, but it has become more prevalent here over the last five years.”
“This isn’t for very small businesses like cafe owners. They still rely on friends and family funding,” continued Simon. “These are typically businesses with at least $1M in adjusted new profit, and scaling from there”.
In summary, Simon commented, “So I think it’s very positive. We’ve got good businesses to list, and we’ve got solid buyers. While you would think that leads to more sales, buyers are being cautious, due diligence takes longer, and deals can fall over for quite fickle reasons.”
“Despite that, I think the next few years are going to be very busy,” stated Simon.
Structural Challenges
Simon sees funding for small businesses in Australia as a hurdle. “Our banking system is built on the back of risk-free lending. The banks make huge profits, but don’t really support this sector of the economy,” Simon explained.
He continued, “In the US, they have the Small Business Administration (SBA). It’s a government agency that connects entrepreneurs with lenders and funding to help them plan, start, and grow their business. They guarantee loans up to $5 million (US dollars).”
“We’ve got nothing like that in this country. Instead, at election time we get lip service about supporting business and then they put their hands in the pockets of small business while tying our hands behind our backs with onerous regulation!”
IBBA and AIBB Conference Benefits
Simon has recently returned from the International Business Brokers Association (IBBA) conference and is looking forward to the forthcoming AIBB conference, so I asked how he benefits from attending.
“There’s two things I always get out of a conference,” he noted.
“First is the educational aspect. While I don’t expect any revolutionary new information, I always walk away with a new way of thinking about old ideas or a reminder of something I forgot, and that is valuable.”
“For example, at the IBBA conference, I went to two workshops on different perspectives of working capital in transactions. Some of the ideas presented in those workshops were worth far more than the cost of attending the conference,” he continued. “And the speakers who’ll be presenting at the AIBB conference will also give us new ways of looking at our businesses.”
“And the second is the opportunity to talk to your peers,” Simon observed.
“Whether you are a broker working for someone else or a broker business owner, there are other people just like you doing what you’re trying to do. Being able to talk and share with them is always a worthwhile experience.”
“I find that the people who turn up to conferences are the type of people who are willing to invest in themselves and others. They’re the type of people who believe the world is an abundant place and we don’t need to see each other as competition. It’s about being part of a community, caring about others, and lifting the industry as a whole,” Simon concluded.
The Future of Business Broking
Simon believes business broking is an exciting but challenging career.
“But you show me a business or job with no challenges, and I’ll show you a business or job that makes no money because it’s too easy,” he said.
He advocates specialisation as a way to truly differentiate. It may take a few years to become known as the expert in a particular field, but once you develop your reputation as the specialist, you can generate more business, and close deals faster, as you know all the key players in the industry.
Simon also encourages all brokers to join AIBB. “As the peak body for business brokers in Australia, the AIBB is helping members with everything from education, compliance, networking, and constantly improving your skills. Let’s be honest, business can be lonely, and it is great to feel a part of a community that truly understands your situation”.
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