Monbetsu (Japan) | The New York Times
Hidekazu Yokoyama has spent three decades building a thriving logistics company on Japan’s frigid northern island of Hokkaido, a region that supplies much of the country’s milk.
Last year he decided to give everything away.
It was a radical solution to a problem that is becoming increasingly common in Japan, the country with the oldest population in the world. As the country’s birth rate has fallen and the society has aged, the average age of entrepreneurs has risen to around 62. Almost 60% of Japanese companies say they have no plans for the future.
Although 73yearold Yokoyama felt too old to stay in business any longer, giving up was out of the question as many farmers were now dependent on his company.
“I definitely couldn’t leave the store,” he said. However, his sons were not interested in running it. Neither do your employees. And few wouldbe homeowners wanted to move to the distant, icy island.
So he posted a message on a platform that helps small business owners in farflung locations find someone to take over the business. The selling price? Zero yen.
The Yokoyama problem is one of the most devastating economic effects of Japan’s aging society. It’s natural for many small and mediumsized businesses to go out of business when the population falls, but policymakers still fear the country could be hit by a wave of closures as older owners retire en masse.
In 2019, a pessimistic presentation by the Japanese Ministry of Commerce predicted that up to 630,000 profitable companies could go out of business by 2025, costing the economy $165 billion and up to 6.5 million jobs.
With Japan’s economic growth already slowing, officials took action in hopes of averting disaster. Officials have launched campaigns to educate older homeowners, give them options to keep their businesses afloat after retirement, and create services to help them find buyers.
To attract the temptation, the authorities offered large subsidies and tax breaks to new owners.
As buyers emerge for the most interesting companies, many small but commercially important companies find it almost impossible to find someone to buy them.
In 2021, government assistance centers and the top five M&A services found buyers for just 2,413 companies, according to Japan’s Commerce Ministry. Another 44,000 were abandoned. More than 55% of them were still profitable when they closed.
Many of these companies were located in small towns, where the problem of succession can be lifethreatening. The collapse of a business, whether a large local employer or a village’s sole grocer, can make it even more difficult for these places to survive the steady attrition of an aging population and the flight to cities that are depleting the country.
After a governmentrun program failed to find anyone to take over Yokoyama’s business, a bank suggested he contact Relay, a company based on Kyushu, Japan’s main island, further south.
Relay differentiated itself by addressing the sense of community and purpose of potential buyers. Featuring beaming owners versus sushi restaurants and idyllic scenery, its offerings aim to appeal to stressedout city dwellers dreaming of a different lifestyle.
The company’s task was not easy in the case of Yokoyama. For most Japanese, the city where his company is based, Monbetsu, which has a population of around 20,000 and is shrinking, could very well be the North Pole. The only industries are fishing and farming, and most of these hibernate as the days grow shorter and snow piles on rooftops. In the height of winter, some tourists come to eat salmon and scallop roe and see the blocks of ice clinging to the town’s humble harbor.
As local farmers grew older and their profits declined, many of them depend on Yokoyama for chores like haymaking and snow shoveling. His days start at 4 a.m. and end at 7 p.m. He sleeps in a small room behind his office.
It would be “extremely difficult” if his business failed, said Isao Ikeno, manager of a nearby dairy coop that has embraced automation, as it has become harder to find workers.
At the cooperative farm, 17 employees take care of 3,000 cattle, and Yokoyama’s company fills in the gaps. No other company in the region can offer these services, Ikeno said.
Yokoyama started thinking about retirement about six years ago. But what happened to the company was unclear.
Though he owed just over $500,000 in debt, years of generous stimulus measures kept interest rates very low, easing the strain, and the company’s annual profit margin was about 30%.
The ad he placed in Relay acknowledged the job was difficult but said no prior experience was required. The best candidate would be “young and willing to work”.
30 requests were made. Among those interested were a couple and a representative of an expanding company. Yokoyama chose an underdog, Kai Fujisawa, 26.
A friend of Fujisawa’s showed him the ad on Relay. He immediately got into a car and showed up at Yokoyama’s doorstep, impressing him with his youth and enthusiasm.
Still, the transition was not smooth. Yokoyama isn’t entirely convinced that Fujisawa is the right person for the job. The learning curve is more difficult than anyone realizes, and Yokoyama’s grizzled, chainsmoking employees are skeptical that Fujisawa can live up to their boss’s reputation.
Most of the company’s 17 employees are in their 50s and 60s, and it’s not clear where Fujisawa will find replacements when they retire.
“There’s a lot of pressure,” Fujisawa said. “When I came here, I was ready to do this for the rest of my life.”
Translated by Luiz Roberto M. Gonçalves