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The Era of mass closures: the Japan businesses without successors You’re Likely to Miss

Outside of Tokyo, Kiyoshi Hashimoto’s machinery factory should be bustling with activity. Instead, the environment is so silent that you can hear him practicing the recorder.

The 82-year-old entrepreneur founded his company nearly 40 years ago, but he has neither a successor nor a buyer for his client-retaining business, which is well past retirement age.

As Japan’s population shrinks and ages, the government warns that this issue could affect up to one-third of all small enterprises in the country by 2025.

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Hashimoto, whose factory in Yachimata, east of Tokyo, is filled with workbenches, drill tables, and parts cabinets, stated, “All of this would be wasted if I were to close the business at this time.”

After scaling back his operations, he is now able to function with only two part-time employees.

The problem is so extensive that Japan confronts an “era of mass closures,” according to Shigenobu Abe of Teikoku Databank, a company that conducts research on bankruptcy.

According to a 2019 government report, approximately 1.27 million small business owners will be 70 or elderly by 2025 with no heirs.

According to a 2019 government report, approximately 1.27 million small business owners will be 70 or elderly by 2025 with no heirs.

The trend could eliminate up to 6.5 million employment and shrink the Japanese economy by 22 trillion yen ($166 billion), according to the study.

According to Teikoku Data, the situation will worsen as baby boomers reach 81, the average life expectancy for Japanese males, who make up the majority of these companies’ presidents.

Abe told AFP, “We are certain that many workers will lose their livelihoods as a result of this.”

A severe strike.

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As in other countries, modest businesses in Japan are frequently transferred to family members or trusted employees.

Young people find small enterprises unattractive due to the country’s prolonged economic stagnation.

The government of Japan has provided generous incentives to encourage business sales, and the private sector has also stepped up to match investors with businesses for sale.

Due to a preference for urban living and a growing trend of rural depopulation, rural businesses face even greater difficulties.

Some elderly Japanese hold the view that selling a family business to an outsider is a disgraceful act.

Some choose to liquidate their businesses rather than pursue buyers.

The government of Japan has provided generous incentives to encourage business sales, and the private sector has also stepped up to match investors with businesses for sale.

BATONZ now produces over 1,000 matches annually, up from 80 when it opened in 2018.

However, it only affects a fraction of those in need, according to BATONZ president Yuichi Kamise.

Waves of closures will result in the loss of the specialized craftsmanship, one-of-a-kind services, and original restaurant recipes that comprise the social and cultural fiber of Japan, he stated.

“Over time, what makes Japan unique could disappear due to a lack of successors,” he explained.

Waves of closures will result in the loss of the specialized craftsmanship, original restaurant recipes, and one-of-a-kind services that comprise Japan’s social and cultural fiber.

I believe it will severely damage Japanese culture and Japan’s appeal as a tourist destination.

Some, however, believe that this trend presents an opportunity to fix inefficiencies and consolidate small businesses that scarcely survive or rely on subsidies.

Hiroshi Miyaji, age 50, is the owner of Yashio Group, a logistics behemoth founded by his patriarch, and has acquired multiple businesses.

“There will always be buyers for firms with unique strengths, specialized knowledge, and human resources, with or without successors,” said Miyaji, a third-generation president.

He recently purchased a modest trucking company from Ayako Suzuki, 61, with assistance from BATONZ.

‘Waiting for someone

Suzuki gave up her corporate career to assist her father in his 1975-founded business.

Chef Rikuo Morimoto used his assets to purchase a four-decade-old Tokyo diner and open a restaurant for a fraction of the going rate.

None of the company’s three drivers were interested in taking over, so she was requested to join and assist her father, who was in his late eighties at the time.

But problems quickly piled up: the coronavirus pandemic struck, a driver quit, and trucks required maintenance; she was forced to use her savings to remain afloat.

“I wanted to maintain the business as long as my father was still alive,” she told AFP.

BATONZ introduced her to Miyaji, who promised to maintain the company’s employees, clients, and vehicles.

“I’m more relieved than sad,” she declared.

I believed that our company had no value.

The abundance of inexpensive small enterprises can be a boon for young people seeking to enter a particular industry.

Among them is chef Rikuo Morimoto, who is 28 years old.

When the pandemic precluded him from studying in Italy, he used his savings to purchase a four-decade-old diner in Tokyo and open a restaurant at a fraction of the usual price.

While offering his own menu, he maintained the décor, furnishings, and many loyal customers of the neighborhood restaurant “Andante” in Suginami.

He stated, “I believed I could only afford a food truck or a small bar.”

Not everyone is so fortunate, and despite his efforts to train three successors, the future of Hashimoto’s machinery factory remains dubious.

He stated, “I’m simply waiting for someone to utilize this.”

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