The Impact of Political Uncertainty on SME Business Sales in Australia 2024-2025

by Arnold Pierce Kelsey 24th of January, 2025

The Impact of Political Uncertainty on SME Business Sales in Australia 2024-2025

In the realm of small to medium enterprise (SME) business sales, the phenomenon of procrastination arises prominently among potential buyers. This hesitance is often rooted in anxiety and a lack of confidence, both of which can be exacerbated by external political factors. As a business broker with considerable experience in this field, I firmly believe that the current political landscape significantly influences the decision-making processes of prospective buyers.

Recent months have been particularly tumultuous for Queensland, characterised by a state election followed closely by the US presidential election. Adding to this complexity is the impending Australian federal election. Such a convergence of significant political events can create a climate of uncertainty that is particularly daunting for individuals contemplating the purchase of a business. This scenario is not merely an inconvenience; it is a critical factor that can stifle the confidence of buyers already grappling with the inherent risks associated with business acquisitions.

The act of purchasing a business is inherently fraught with potential pitfalls. Buyers must navigate financial risks, operational challenges, and market fluctuations. Yet, despite these risks, the rewards of owning a business can be substantial, both financially and personally.

The ability to create something of one’s own, to drive growth, and to foster innovation is a compelling prospect.

However, the current political climate can overshadow these potential rewards, creating a mental barrier that halts decision-making.

The impact of recent electoral events cannot be understated. With the state election leading to shifts in local governance and policies, coupled with the broader implications of the USpresidential election on global markets, potential buyers may feel overwhelmed. The uncertainty surrounding the Australian federal election adds another layer of complexity, making it challenging for buyers to discern the right moment to proceed with their investment decisions. In this environment, the natural human tendency to procrastinate can take centre stage, leading to delays in business transactions that would otherwise be advantageous.

I anticipate that the SME business sales market may experience a slowdown in activity in the immediate months following these elections. However, history suggests that once the dust settles, particularly after the federal election, there is a high likelihood of a robust rebound in buyer confidence. The key to unlocking this potential lies in the ability of buyers to overcome their anxieties and embrace the opportunities that lie ahead.

It is essential to recognise that while election outcomes may influence specific sectors or businesses, for the majority, it is “business as usual”. The fundamentals of successful business ownership remain unchanged, despite the political backdrop. Therefore, I encourage potential buyers to “toughen up” and take the leap into entrepreneurship. The decision to buy a business could very well be the most rewarding choice they ever make.

In summary, while the current political landscape may present challenges and foster uncertainty, it is crucial for potential buyers to remain focused on the long-term benefits of business ownership.

The temporary lull in market activity should be viewed as an opportunity for introspection and preparation. As we look forward to the post-election landscape, potential buyers should seize the moment to make informed decisions that could lead to prosperous futures.

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