Japan’s Business Owners Can’t Find Successors. This Man Is Giving His Away.

But building that business has been a long process. In years past, small-business owners, particularly those who ran the country’s many decades- or even centuries-old companies, assumed that their children or a trusted employee would take over. They had no interest in selling their life’s work to a stranger, much less a competitor.

Mergers and acquisitions “weren’t well regarded,” Mr. Watanabe said. “A lot of people felt that it was better to shut the company down than sell it.” Perceptions of the industry have improved over the years, but there are “still many businesspeople who aren’t even aware that M.A. is an option,” he added.

While the market has found buyers for the businesses most ripe for the picking, it can seem nearly impossible for many small but economically vital companies to find someone to take over.

In 2021, government help centers and the top five merger-and-acquisitions services found buyers for only 2,413 businesses, according to Japan’s trade ministry. Another 44,000 were abandoned. Over 55 percent of those were still profitable when they closed.

Many of those businesses were in small towns and cities, where the succession problem is a potentially existential threat. The collapse of a business, whether a major local employer or a village’s only grocery store, can make it even harder for those places to survive the constant attrition of aging populations and urban flight that is hollowing out the countryside.

Article source: https://www.nytimes.com/2023/01/03/business/japan-businesses-succession.html