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Half of SMEs Unready for Succession Sales
14 Oct
Summary
- Half of succession-seeking SMEs are not deal-ready.
- Valuation, buyer proposition, and preparation are key barriers.
- Millions of ASEAN SMEs face urgent succession needs.
Internal estimates from match.asia reveal that approximately half of small and medium-sized enterprises (SMEs) in Southeast Asia exploring succession-driven sales are not yet transaction-ready. This situation arises from common barriers such as significant valuation gaps, unclear buyer propositions, and inadequate business preparation.
The urgency is mounting as millions of micro, small, and medium-sized enterprises across the ASEAN region represent a substantial portion of employment and regional GDP. Despite many founders anticipating stepping back within the next decade, a considerable number lack a defined succession path, highlighting a critical gap.
Among the identified obstacles, valuation gaps account for about 50%, where seller expectations are often unrealistic. Roughly 40% face a buyer-proposition gap, meaning their business doesn't offer a compelling investment case. Furthermore, about 33% experience a preparation gap, lacking essential operational readiness and documentation for buyer due diligence.
Buyers require confidence in sustainable profitability, market position, reliable records, and capable management for a successful transfer. Sellers often overestimate their business's value based on past achievements, while buyers focus on future potential, creating a common point of friction.
match.asia offers exit-planning workshops and tools to help SME owners address these readiness issues. By aligning sellers and buyers on expectations and preparation early, the platform aims to reduce execution risk and facilitate smoother transitions for viable transactions.
