The BOUNCE back
Business surprised by level of recovery and spending but some in wait mode
Demand from people looking to buy businesses in the Bay is outstripping supply as economic confidence in the region bounces back post-covid-19. Experts say owners were in recovery mode — there had been fewer insolvencies — and some businesses had reported they were busier than the same time last year and needed more staff.
They say the Government’s support package, including wage subsidies, and strong consumer spending in the region have no doubt played a part in the bounceback.
The biggest challenge for business owners now was a shortage of stock heading into the festive season and the new year.
Chris Small, managing director at ABC Business Sales, said the Bay of Plenty was following national trends of a strong bounceback.
“One of the reasons is because the wage subsidy did its job and kept people employed.”
ABC Business Sales, which has offices in Tauranga and Rotorua, sold more than 300 businesses in the past 12 months and only 1 per cent of those were because of pressure after the Covid-19 lockdown.
Figures for the Waikato/bay of Plenty region showed the company sold about 100 businesses in the year to October 2019 and sales dropped 10 per cent in the year to October 2020.
“Less people have come to the market to sell their business and are more focused on trying to sort their business out after Covid rather than coming straight to the market.”
Small said the company’s website
New Zealand’s awash with money. Tom Rodewald, Tauranga-based
insolvency specialist
viewings had jumped from about 1500 a year ago to amonthly average of about 25,000.
“There are so many people looking for businesses,” he said. “As soon as a good business comes up it goes so quickly and we’re getting multiple offers just like the housing market.
“But at the other end of the scale, our new business listings are down
20 per cent. We’ve got a lack of supply but a massive demand.”
Every sector, including manufacturing, sales and childcare were “going well”.
“The bounceback has been really strong,” he said. “Insolvency and receivership are no longer words spoken any more.”
He called it a V-shaped recovery, with things grinding to a halt in April and May but picking back up in June. Some businesses, he said, were performing even better than they were this time last year.
“Business sales that are happening are people looking for a new challenge . . . but it’s certainly not because of Covid. People have got their confidence back.”
The rural sector and the Port of Tauranga were the key drivers of the Bay’s economy, he said.
“The housing sector is going really well in the Bay, jobs haven’t dried up and you’ve got people coming in their droves.”
Small said manypeople were moving from Auckland and looking to buy businesses in the Bay, including Tauranga and Rotorua.
Tauranga-based insolvency specialist Tom Rodewald said business had been quiet and he put it down to businesses recovering better than expected from the Covid-19 lockdown.
Rodewald said for every 10 inquiries there might be two or three jobs that were businesses in receivership while the others needed assistance in turning their business around.
“There is a hell of a lot of money in the economy. New Zealand’s awash with money. People are spending it in New Zealand because they can’t go overseas.
“That has meant a lot of businesses have got through the lockdown a lot better than anybody thought.”
Rodewald said his workload this year had been “patchy”, with very few inquiries.
“Probably the worst in my insolvency work life,” he said. “There’s been very little work coming through the door until about three weeks ago.”
The managing director of Rodewald Consulting Limited said there seemed to be a lot of people in the marketplace “cleaning the decks”. He said nothing major had come in since discount retail chain