The election seems to have put a brake on selling activity. The result could take the market either way…
It appears that the federal election may be having an impact on buyer behaviour when it comes to buying and selling businesses. While the number of people looking at businesses for sale remains fairly steady, the number of inquiries appears to have dropped in recent weeks.
It will be interesting to see what happens after the election, and whether the outcome will actually have any impact on this. It is not unusual for people to postpone large decisions (and buying a business is certainly a big one) during periods of uncertainty.
The interesting thing is that history has shown that the level of activity pre and post a large event is quite different. And while it is difficult to prove statistically, it appears to be almost regardless of the outcome of the event.
Of course the election is not the only factor that potential owners have to consider. The recent decline in consumer confidence and the increased attention given to global inflationary pressures caused by food and oil demand shortages are weighing heavily on the minds of some potential buyers.
Then there are seasonal factors to consider. Christmas in particular has a tendency to reduce the level of business sales transactions. So for those of us interested in the private business market, it looks like a case of wait and see. Perhaps the election result will trigger a renewed interest in business ownership.
To read more Andrew Kent blogs, click here.
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