Business Succession & Exit planning – a major election issue ?
As we move closer towards a federal election in September 2013, it is interesting to see the focus of the key contenders, their policy announcements and the effect they might have on SME and business generally. Their appears to be a groundswell of support and action from business owners generally seeking government support / legislation and policy change which will stimulate activity in the economy and improve the fortunes of SME business owners.#2big2ignore is promoting actively an SME campaign to attract the attention of candidates to the plight of small business owners.
One of the key areas they need to look at is the imminent transfer of wealth as baby boomers retire ( Baby boomers turn 65 between 2011 and 2030 ) for that entire 20 year span there are between 4800 and 5600 boomers reaching age 65 every week in Australia – obviously not everyone retires on the day they turn 65 and now their is a trend towards semi-retirement. For those baby boomers that are also business owners this event and the subsequent transfer of their business ( for many their largest asset ) represents a key aspect of retirement planning / funding.
One of the key reasons my business focuses entirely on this issue is the scale and size of the potential market and the resulting loss of wealth when transfers are not successfully completed – there are still large numbers of businesses who walk away / close the doors or even “gift” the business to their kids.
As President of the Australian Chapter of the Exit Planning Institute I have seen a large increase in interest and awareness of this topic and the key issues of the transfer of wealth ( estimated by some to be as high as $1.4Trillion ) – but no government interest! I have written to Wayne Swan, Julia Gillard and other ministers and proposed several ideas to look at solutions for business owners – none have replied.
The obvious key issue here is funding – if business owners walk away from the wealth tied up in their business then they need an alternative to funding retirement and one of the key statistics about SME business owners is they typically don’t invest into super – “my business is my super ! “