William Buck invited more than 2,500 business owners to participate in a survey to measure the level of exit readiness of owner-managed businesses in Australia and New Zealand.

The survey revealed that almost 50% of business owners – most of who were born in the 1946-1964 Baby Boom – planned to exit their business in the next five years, and 70% in the next decade.

The survey

There are approximately 2.13 million actively trading businesses in Australia.   Small to medium sized businesses (being those that employ less than 200 staff) comprise the overwhelming majority of these businesses  and are largely owner managed.

The economic importance of these businesses is significant as they employ over 7.0 million Australians  and generate over $1.5 trillion in sales income per year.

The profile of the operators of these businesses is changing and recent data shows that approximately 55% of all business operators are aged 45 years or over.

With the importance of small to medium businesses and their ageing owners in mind, William Buck undertook a rapid response survey of owner managed businesses in Australia and New Zealand with an annual turnover of up to $100 million earlier this year.  The survey was focused on understanding the issues relating to the ageing profile of business owners, their aspirations and their business succession plans.

The results of the survey indicate that, with an increasingly large number of business owners approaching retirement, business succession planning continues to be neglected. The survey results highlight that business owners in Australia have yet to address a number of significant issues critical in planning for a business succession that optimises both the likelihood of the business continuing and the funds available to help fund the retirement to which they aspire.

Key findings

Baby boomer business owners are ill-prepared to sell their businesses, despite many viewing it as their main source of retirement income.

In total, nearly 50% of business owners plan to exit their business in the next five years and 70% in the next ten years. Despite this, business owners are entering unchartered waters with more than 65% of these businesses having been “started from scratch” and with a majority of owners having never bought or sold a business nor having been approached by a potential buyer.

More than 50% of business owners would like to see their business continue as a going concern after they exit, yet 65% believe they will have difficulty finding a buyer (or are unsure if they will have difficulty finding a buyer).

More than 30% of business owners plan to retire following the sale of their business but another 32% plan to either start or acquire another business and a further 17% plan to continue in some form of paid employment.

For most owners surveyed the business is the primary asset which will fund their retirement, yet more than 50% have never had their business professionally valued and most do not know how to maximise the value of their business for sale.

Despite this almost 40% of business owners believe that they have an adequately funded retirement plan.

Approximately 65% have no idea how much tax they would have to pay on the sale of their business and most do not know whether they would qualify for the small business capital gains tax concessions.

The results

The survey was divided into five areas, detailed results for which can be found below.


While business owners may have planned for the establishment, growth and success of their businesses, they do not appear to have clear plans for their exit from the business.

The survey results highlight a number of key issues that will need to be addressed by small business owners in the period prior to their exit from the business.  We recommend that business owners consider the following when designing an exit plan:

  • Business owners should start preparing for the sale of their business three to five years ahead of when they would like to sell. Spontaneous sales due to ill health or a change in circumstances will almost certainly result in a sub-optimal outcome.
  • Exit preparation starts with a professional valuation of the business. Often this value is less than a business owner expects (many small to medium businesses have a history of reinvesting surpluses in growth and innovation but this does not provide a future purchaser a clear understanding of profitability).
  • A vendor due diligence assessment of the business should be undertaken so that your business is reviewed from the perspective of a potential buyer who has to make a fair return on their investment.
  • An early strategic valuation and due diligence assessment with a corporate adviser enables owners to determine the true profitability of the business and its key value drivers.
  • Given a three to five year lead time, owners can design an action plan to “exit ready” their business by restructuring, cutting costs, closing down loss making divisions and generally strengthening its key value drivers. This housekeeping is a valuable process regardless of the future sale of the business.
  • Business owners should also work closely with their tax advisor to design an exit tax plan. An early understanding of capital gains and other tax implications will influence the sale strategy.
  • Set up an advisory board consisting of the owner and a small group of trusted advisers that meets on  a quarterly basis to review your progress against the action plan, to provide advice and encouragement and most importantly, to hold you accountable.
  • Over the three to five year exit lead up period, ensure your record keeping is transparent and easy to follow for a future purchaser
  • Identify potential purchasers well ahead of time – especially competitors who will see the dual benefit of expanding their business and removing a competitor. Understand their needs and future requirements and how your business might fit with theirs.
  • Determine the approach you will take – expression of interest, private sale or using a business broker.


Irrespective of the individual circumstances, an increasingly large number of business owners are approaching retirement and will soon need to seriously address issues relating to business succession planning.  Such planning requires time in which to implement changes that could significantly improve the outcomes of a business sale.  Business owners should ideally start preparing for the sale of their business three to five years ahead of when they would like to sell.

Business owners generally plan when establishing their business and they plan to develop and grow their business.  They should now plan for their successful exit from their business.