THE average age of entrepreneurs selling off their businesses has been shrinking in recent years.
The founding director of BCMS, a market leader in the sale of privately owned enterprises in the UK, David Rebbettes, said the average age in South Africa has over the past seven years ranged between 45 and 54.
The average age used to hover in the early 60s.
"The average age of sellers has changed and historically it used to be people approaching retirement age. It has gone down recently," Rebbettes, whose business also operates in South Africa, said.
"In the past seven years the average age has gone down mainly because there were many younger entrepreneurs, who are generally people in the technology industry."
Rebbettes was speaking at Citadel's "Considering selling your business" seminar on Friday.
He said entrepreneurs usually sold their businesses on realising they had been turned into bureaucrats instead of entrepreneurs.
He said some entrepreneurs sold their businesses because they wanted to try something new while others were motivated by the poor financial position of their companies.
They would reason that their companies needed an additional cash injection that would result in the company not closing shop, he said.
"Some people just sell to start a new business," he said.
Rebbettes said 75% of acquisitions were generally considered a failure within a year and 18 months.
He advised that a contract stipulating a non-compete period should be signed. "However, I can't remember seeing a seller opening a competing business close to their previous firm," he said.
Economist Mandla Maleka said the data showed that people were taking risks at a younger age.
"This could mean that we have younger people taking risks because government is providing support, like entrepreneurship support programmes and tenders," he said.
He said it was also possible that white entrepreneurs felt that they were being sidelined by black economic empowerment policy. "I hope this is not the case," he said.
"If it is black guys, it means people are being entrepreneurial and are taking advantage of government tenders," said Maleka.
Rebbettes said the biggest challenge of finding a good buyer was that there were not many around.
"We usually find 200 potential customers and have to dig up a lot of stuff on them so that we can narrow the number to about six," he said.
Business sellers getting younger
THE average age of entrepreneurs selling off their businesses has been shrinking in recent years.
The founding director of BCMS, a market leader in the sale of privately owned enterprises in the UK, David Rebbettes, said the average age in South Africa has over the past seven years ranged between 45 and 54.
The average age used to hover in the early 60s.
"The average age of sellers has changed and historically it used to be people approaching retirement age. It has gone down recently," Rebbettes, whose business also operates in South Africa, said.
"In the past seven years the average age has gone down mainly because there were many younger entrepreneurs, who are generally people in the technology industry."
Rebbettes was speaking at Citadel's "Considering selling your business" seminar on Friday.
He said entrepreneurs usually sold their businesses on realising they had been turned into bureaucrats instead of entrepreneurs.
He said some entrepreneurs sold their businesses because they wanted to try something new while others were motivated by the poor financial position of their companies.
They would reason that their companies needed an additional cash injection that would result in the company not closing shop, he said.
"Some people just sell to start a new business," he said.
Rebbettes said 75% of acquisitions were generally considered a failure within a year and 18 months.
He advised that a contract stipulating a non-compete period should be signed. "However, I can't remember seeing a seller opening a competing business close to their previous firm," he said.
Economist Mandla Maleka said the data showed that people were taking risks at a younger age.
"This could mean that we have younger people taking risks because government is providing support, like entrepreneurship support programmes and tenders," he said.
He said it was also possible that white entrepreneurs felt that they were being sidelined by black economic empowerment policy. "I hope this is not the case," he said.
"If it is black guys, it means people are being entrepreneurial and are taking advantage of government tenders," said Maleka.
Rebbettes said the biggest challenge of finding a good buyer was that there were not many around.
"We usually find 200 potential customers and have to dig up a lot of stuff on them so that we can narrow the number to about six," he said.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos