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With 60 per cent of small business owners approaching retirement age, now is the best time to implement a succession plan, says the small business ombudsman.
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Businesses should start succession planning, says small business ombudsman
12 March 2021
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9 minute read
The Australian Small Business and Family Enterprise Ombudsman and Family Business Australia on Wednesday released a new succession planning guide, urging ageing small business owners to adopt a workable succession plan.
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“Australia’s most successful family business stories — and there are many — are a result of well-executed succession planning,” said Kate Carnell, Australian Small Business and Family Enterprise Ombudsman.
“However, a KPMG report reveals 54 per cent of family businesses have no documented succession plan in place and no retirement plan for the current CEO.”
The guide comes as the highest proportion of small business owners approach retirement age, with a majority aged between 45 and 59 years old, Ms Carnell said, and the economy presents new challenges in attracting buyers.
“This generational shift presents a number of challenges for the sector and the economy more broadly, as some business owners may find it difficult to attract a buyer,” she said.
“It really highlights the need for meticulous succession planning for those family business owners who are planning to retire in the coming years.”
Within the guide, business owners are offered insight into the best time to start planning, whether family succession may even be the best option, and how to roll out an orderly succession plan.
But succession planning, particularly among family-owned and run businesses, can be difficult to navigate, said Greg Griffith, CEO at Family Business Australia, and the new guide should help business owners navigate challenging conversations with family.
“The key to families working well together is to have really open and honest communication — which can be difficult when your boss, colleague or direct report is also a member of your family,” Mr Griffith said.
“Succession planning can be challenging, but with the right approach, supported by quality information and advice, you can achieve rewarding outcomes.
“Our succession planning guide offers practical tips to ensure an orderly transition process.”
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