Hidekazu Yokoyama has spent 30 years building a thriving logistics business on Japan’s snowy northern island of Hokkaido, an area that provides much of the country’s milk.
Last year, he decided to give it all away.
It was a radical solution to a problem that has become increasingly common in Japan, the world’s oldest society. As the country’s birthrate plummets and its population ages, the median age of business owners has risen to around 62. Nearly 60 percent of the country’s businesses report not having a plan for what’s next.
Although Yokoyama, 73, felt too old to continue much longer, giving up was not an option: too many farmers depend on his business. But his sons were not interested in running it. Neither did his employees. And few potential homeowners wanted to move to the remote, frozen north.
So he placed an ad on a service that helps small business owners in remote locations find someone to take over. The advertised sale price: zero yen.
Yokoyama’s situation symbolizes one of the potentially most devastating economic impacts of Japan’s aging society. It is inevitable that many small and medium-sized businesses will go bankrupt as the population dwindles, but lawmakers fear the country could be hit with a wave of closures as older owners retire in droves.
In 2019, Japan’s Ministry of Commerce projected that by 2025 around 630,000 profitable businesses could close, costing the economy $165 billion and up to 6.5 million jobs.
Government offices have launched campaigns to educate older homeowners about options for continuing their businesses beyond retirement and have set up service centers to help them find buyers. The authorities have also established significant subsidies and tax breaks for new owners.
In 2021, government help centers and the top five M&A services found buyers for just 2,413 companies, Japan’s Ministry of Commerce reported. Another 44,000 were abandoned. More than 55 percent of them were still profitable when they closed. Many of those businesses were in small towns and cities.
After a government program failed to find someone to take over for Yokoyama, a bank suggested he place an ad with Relay, a Kyushu-based company.
He received thirty responses. Yokoyama settled on a 26-year-old, Kai Fujisawa. A friend had shown the advertisement to Fujisawa, and Fujisawa immediately got into a car and appeared at Yokoyama’s doorstep, impressing him with his youth and enthusiasm. But Yokoyama isn’t entirely convinced that Fujisawa is the right person for the job. The learning curve is steeper than any of them had imagined.
Most of the company’s 17 employees are in their 50s and 60s, and it’s unclear where Fujisawa will find people to replace them when they retire. “There is a lot of pressure,” Fujisawa said. But “when I came here, I was prepared to do this for the rest of my life.”
By: Ben Dooley and Hisako Ueno
BBC-NEWS-SRC: http://www.nytsyn.com/subscribed/stories/6523862, IMPORTING DATE: 2023-01-09 20:10:06
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