SME business owners Succession and Exit Planning survey - Succession Plus

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SME business owners Succession and Exit Planning survey

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SME business owners Succession and Exit Planning survey

By , March 28, 2013

According to recent survey findings by MSI Global Alliance of over 600 Australian and New Zealand SME business owners, just 24% of owner-managed businesses have a formal business succession planning in place while more than one third do not have key person insurance to cover an orderly business succession in the event of the death or disability of an owner-manager.

Some other relevant findings from the report:

Business owners

76% of owners do not have a documented Business Succession Agreement in place.
24% of owners do have a plan
Of this group:
40% said it was because they ‘just haven’t got round to it’
12% said it was because they ‘don’t think it’s important’
10% said it was because they were ‘not sure which steps to take’
Of those who do have a plan:
19% review it every year
26% have never reviewed the plan
36% do not have key person insurance in place as part of their plan to cover the buy-out or replacement of a working partner in the event of death or disability

Aspiring business owners

89% said that they would take the steps to create a documented Business Succession Plan (compared to just 24% of business owners who said they do have a current business plan in place)
Of the 89% who said they would take steps to create a plan:
54% said they would want to review it every year
31% said they would want to review it every two to five years
100% of aspiring business owners said they would want to obtain key person insurance
58% of aspiring business owners said they would review their key person business succession insurance provisions every year, with 37% wanting to review every two years

Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.