RSM Bird Cameron’s thinkBIG 2015 study has revealed that 44 per cent of SME owners have a plan to exit their business, which shows a steady increase over the past few years. 16 per cent of business owners said they plan to exit the business this year, 19 per cent in the next one to two years and 22 per cent in the next three to four years. 41 per cent plan to exit in five to 10 years.
Andrew Graham, national head of business solutions, RSM Bird Cameron, said, “These numbers will continue to increase over the next few years, particularly as more baby boomers head towards retirement.”
The study showed that the proceeds of the sale of the business will be the primary source of retirement funds for approximately 30 per cent of respondents, which is slightly less than in 2014.
Andrew Graham said, “This demonstrates that there is not a significant reliance on the sale of the business for retirement funding, which could be due to ongoing segregation of assets away from the business, particularly through the use of superannuation.
“The reduction in the number of business owners using the sale of the business as the primary source of retirement funds could also reflect improving investment returns over the past few years.”
Exit planning is just as important as business planning since exiting the business is inevitable. Ideally the exit will incur as little stress as possible with a clear line of succession or transition plan in place.
Andrew Graham said, “The most successful business owners are planning for their exit even as they plan for growth or expansion. Developing business strategies around the exit plan is a good way to keep the business on track and minimise risk.
“An effective exit plan addresses questions such as family succession, employee equity, tax considerations, timing and more.”
thinkBIG has measured the pulse of the Australian SME sector since 2005. It benchmarks business growth and profitability, business planning, exit planning, superannuation and the impact and uptake of technology. 446 business owners participated in the 2015 study, providing insights into how Australian SMEs feel about their business.
Source: RSM Bird Cameron
