In The Media

Sentry Group chief executive and chairman Murray Hills said the national licensee group had noticed succession planning was a significant challenge for Australian small to medium enterprise (SME) owners, particularly among the baby boomer generation.

“The depth of challenges facing baby boomers seeking to retire in the coming years is enormous, with the greatest [concern] being that of trying to sell a business in a buyers’ market,” Hills said.

Aligned product providers and competitors would see the most strategic value in purchasing a financial planning business and therefore should be considered as part of a business owner’s succession plan, according to Succession Plus.

In order to formulate an effective succession plan, SMSF strategists and other practitioners need to know the key drivers of revenue in their businesses, especially those elements that will come into play in the future, according to an industry expert.

The lack of retirement preparedness by small business owners continues to be a major concern, according to Craig West, founder and chief executive officer of Succession Plus.

A business succession planning expert predicts problems on the horizon for many financial advisers and their SME business clients, where each may be putting off their succession plans until it is too late.

Australian small businesses represent a retirement income challenge in circumstances where 33 per cent of small business owners have said they are entirely reliant on the sale of the business for cash to fund their retirement, yet 75 per cent do not have an agreed or documented succession plan.

Three years ago, Craig West ran a typical small accountancy practice. He had a turnover of $170,000, employed a couple of people and was preoccupied with tax returns for 450 clients.

If a client walked in the door and was "living, breathing and had a heartbeat", West was happy to look after him or her, even with straightforward personal tax returns.