Small businesses struggle
THE Fraser Coast is in the grip of a three-speed economy as multi-million dollar investment projects gain traction at one end of the spectrum while the smaller end of town struggles.
Caught in the middle is a broad middle class populated by wage earners, about half of whom bring home less than $500 a week.
This phenomenon was commented upon by a senior Target executive contacted by the Chronicle last week to discuss the possible opening of a new Target outlet in Station Square shopping centre in Maryborough.
While the pending developments of St Stephen’s Hospital ($110m), Stockland Shopping Centre ($100m), Wyndham Hervey Bay Resort and Rosewood eco-resort ($60m) will kick-start the economy once shovel ready, it may be too late to save many small business that have been paring back in the tough times and are now against the wall.
“The big issue facing us is that over the past few years is small businesses have been becoming smaller to survive,” Fraser Coast Business Brokers principal Martin Fraser said.
“We are a good example in that we have gone from a staff of five to a staff of one and moved out of our expensive CBD offices and we can’t shrink any further.
“This is the same experience as 90% of our coastal clients.”
Mr Fraser said his brokerage, which has businesses for sale on the books priced from $30k to $16m, had about one quarter of the number of viable businesses for sale as it had two years ago.
He said there were businesses that had just closed their doors and walked away, taking a loss rather than trying to sell an enterprise that did not have a solid financial position.
Mr Fraser believed the Fraser Coast was over serviced in the cafe/takeaway food sector.
He also said businesses dependent on fine weather or tourism – or both – had struggled in the past 18 months.
Chesney Commercial Sale and Leasing principal Arthur Chesney echoed Mr Fraser’s analysis.
“I know of four small businesses that I have had on sale have closed up and walked away,” he said.
“Another is likely to do the same in August if the business doesn’t sell."
Mr Chesney said the market was the toughest for small business that he had seen in his 16 years as a broker.
In the reigning buyers’ market, Hervey Bay’s Hype Commercial spokesman Ivan Managh said there was plenty of value to be had for enterprising owners.
“There have been no businesses ringing us and saying ‘we have to be gone tomorrow’,” he said.
“There have been no fire sales.”
Hype Commercial has about 80 businesses for sale on its books – the best buy being a Hervey Bay cafe that is selling for about $200k.
MOST WANTED IN A BUSINESS
- Freehold title
- Five-year strong financials
- Price to reflect earnings not potential