Businesses for sale remain near record levels according to the latest (March 2013) BizExchange Index.
There was some softening in prices for businesses with turnover less than $1 million however prices for larger businesses were noticeably stronger.
“This reflects the difficult market conditions for small retailers and hospitality businesses” BizExchange Chairman David Bird said.
“It may also presage the first wave of baby boomers selling good, established businesses”.
The Restaurant and Catering Association has blamed exploding wages for damaging profitability.
Mr Bird commented that most small businesses are critical of the negative impact of Fair Work legislation which has reduced the flexibility of working hours and other conditions.
In addition to these issues Mr Bird observed that over-capacity created in the lead up to 2008 may also be a factor affecting the profitability of restaurants.
The downturn in the mining and construction industries has led to the deferral of many projects. This will have a substantial flow-on effect, putting pressure on service industries which are heavily project related.
All businesses dislike uncertainty and the current Federal Government has tended to exacerbate this with numerous policy changes adding to the general uncertainty surrounding the world economy.
The one bright spot is that for potential business buyers able to fund a purchase the current environment may provide an ideal time to invest.