Did you know that Australia’s family and private businesses occupy almost every segment and industry of our economy?
Contributing over a third of Australia’s entire GDP, it is evident that ensuring the ongoing success of these businesses is crucial to Australia’s prosperity.
A recent report found 69% of family and private business owners are planning to sell or pass on their business, which equates to 350,000 businesses changing ownership. Whilst 38% of these businesses are looking to pass the ownership onto the next generation, 83% still do not have a succession plan in place.
What is a succession plan?
A succession plan allows business owners to have the confidence in knowing that there is a reliable plan for the ownership and management of their business once they are gone.
A lot of the time families assume that their business will automatically pass onto the next generation. This transition is not always as smooth as people think, in fact 70% of wealth transitions fail, with origins lying within families themselves.
The many advantages of planning for succession include the following:
- Smooth ownership transition
- Continued business growth
- New capital, new ideas and new jobs
- Attract and retain the right talent and skills and create new business opportunities
- Positive impact on the well being of families
It is never too early to start planning for succession, in fact the earlier you start the more you can relax knowing that your change in business ownership will be an easy transition.
If you have any questions on succession planning or any other queries about how you can plan for the future of your business, contact your Ledge Finance Executive directly or contact us here.
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