Succession and Exit
Latest research findings – Succession in the 21st Century – Succession Reset
According to recently released research from Swinburne University of Technology in Melbourne, the succession planning challenge faced by baby boomer business owners continues to develop, with only 15% of baby boomer business owners globally having completed their succession plans. By the time 2020 arrives this group will be aged between 56 and 74 years of age and they presently control many of the privately owned businesses throughout the world.
Some interesting findings from the research include the underlying belief that selling the business is always an option (73.6%), however many business owners still expect the business to be retained within the family at the conclusion of this succession planning process (60%).
Interestingly, the research also highlights the most common advice from respondents was to start the process earlier – the most common triggers to commence are:
- professional advice recommending the plan commence,
- the current generation being ready to transition out,
- the incoming generation being interested and ready to step up.
For business owners who have completed their business succession and exit planning process – the vast majority consider they have achieved their principal outcomes (87.9%).
Even more interesting – selling the business for the best price was only the sixth highest priority ( 30.4 % ) though this was higher with just Australian business owners responses – with Continuity of the business ( 86.6 % ) , family harmony ( 73.5 % ) and ongoing jobs for employees ( 72.7 % ) all ranking highly.
The number one barrier faced by family owned businesses was the ensuring fair distribution of assets amongst family members.
According to the author, Dr Richard Shrapnel, the research highlights 8 “guiding principles”
- Succession is not retirement
- Start with readiness
- Set your goals before the journey
- Harmony is a must
- Price is not first
- Plan early, start earlier
- Equality is not equal
- Ask before you get lost.