One out of five private businesses in Singapore to change hands in the next decade
One out of five private businesses in Singapore to change hands in the next decade
Singapore, 25 July 2007 - The latest findings from the International Business Report (IBR) shows that one out of five (21%) of privately held businesses in Singapore are expected to change ownership within the next ten years. This expectation level has almost doubled since 2005 as only 11% of privately held businesses were expecting ownership change then. Globally, 28% of privately held businesses are expected to be changing hands.
The annual survey found that business churn in the next decade is expected to be the highest in South Africa (52%) followed by New Zealand (51%), Canada (50%) and the Philippines (48%).
The greatest change in attitudes to business ownership is in the Philippines which has seen the expectation of a change in the next ten years grow from 6% in 2005 to 48% this year. Of these businesses, 67% are expecting a change of ownership in a slightly longer time period of six to ten years. In contrast Indian business attitudes have remained static over the same period and are least likely to change hands, with only one in ten owners expecting to sell in the next decade.
Aw Eng Hai, Partner of Foo Kon Tan Grant Thornton said: “Our findings show an overwhelming expectation of change in the structure of privately held businesses globally in the coming years. In Singapore, the expectation level of change in ownership has almost doubled since 2005. With this in mind, business owners need to start planning for the future and take professional advice on how to best plan an exit from the enterprise.”
Pace of change
The survey of 7, 200 business owners in 32 countries also found that, of those businesses expecting to change hands, 25% will do so within the next two years. The greatest opportunity for involvement in a business exit is in Germany, with 39%, followed by South Africa (38%) and Sweden (37%), anticipating a change in ownership within the next two years. Globally, of the privately held businesses that are expecting a change in ownership in the next decade, almost half (48%) expects the change within the next five years.
Type of change
Globally, a trade sale (25%) is the most likely future of a privately held business, followed by private equity/bank finance (20%), and management buy out/buy in or mergers (both at 16%). Sale or transfer to a family member is the expected outcome for 15% of these businesses internationally.
