Succession planning that honours the business you built
For many small business owners, the business they’ve built is more than a livelihood, it’s a legacy. Building a successful business takes years of hard work and dedication and when you're ready to retire or move on to the next chapter of your life, the path isn’t always clear. That's where succession planning comes in.
Whether your children have chosen different careers or there’s no obvious successor in sight, succession planning can be one of the most emotionally and financially complex aspects of running a business.
Recent Australian research shows that most small businesses won’t be passed on to the next generation. In fact, nearly half of SME owners expect that when they retire it will result in the closure of the business or selling to someone outside the family.
Only 39% anticipate a family member taking over, and just one-third have a documented succession plan in place.
Without a clear plan, many business owners find themselves working well past the traditional retirement age. The reasons vary from lack of interest from family, uncertainty about valuation or simply not knowing where to start and the consequences can be significant.
Who will take over your business?
Succession planning isn’t just about protecting financial outcomes; it’s also about preserving relationships. When expectations are unclear or decisions are made under pressure, family dynamics can suffer. Open conversations, guided by a shared vision and professional advice, can help avoid misunderstandings and make sure that everyone feels heard. Even if the next generation isn’t stepping in, a thoughtful plan can honour your legacy and reduce stress for those around you.
A plan also helps the business operate without disruption during change, which is vital for employees, customers, and stakeholders alike.
Start early for a smoother exit
The key to a successful business exit is planning early.
A well-considered succession plan allows you to decide how and when you leave your business, rather than being forced to react to circumstances.
Planning ahead also helps avoid complications with the Australian Taxation Office. Transferring control or assets within a family business can trigger tax consequences, especially if the structure isn’t reviewed in advance.
A strong succession plan should cover:
- whether you’ll retain any ownership or involvement post-transition
- how the successor will fund the purchase (if applicable)
- contingencies for unplanned events like illness or sudden death
- tax implications of asset transfers, CGT, GST, and restructuring
- a current business valuation and regular reviews
- legal documentation and buy-sell agreements
If your business involves trusts, shareholder loans, or complex structures, it’s particularly important to seek professional advice. The ATO is actively reviewing transactions involving family wealth transfers, internal restructures, and use of concessions so clarity and compliance are key. Transactions of interest include assets being moved around within a private group; family member interests being restructured; accessing of concessions, exemptions and rollovers; settlement of shareholder/associate loans (Division 7A loans); and transfer of wealth through trusts.
Get good advice
Succession planning isn’t just about paperwork. Whether you’re preparing your business for sale, transferring ownership to a family member, or simply exploring your options, professional advice can make all the difference.
We can help you to:
- choose the right tax structure
- understand the implications of buy-sell agreements
- maximise available CGT concessions
- prepare your business for valuation and sale
If you’d like to start the conversation or review your existing plan, please contact our office. The earlier you begin, the more choices you’ll have and the more confident you’ll feel about your next chapter of your business.
