Insights from MYOB’s Bi-Annual Business Monitor reinforces the need for SMEs to prepare for an intergenerational shift in ownership, as the data shows just a quarter (24%) of small and mid-sized business (SME) owner and operator respondents have a succession plan in place for their exit.
The research found 48% of Baby Boomer business owners and operators (aged 60-78) plan to exit in the next one to five years, with 87% departing due to retirement. Thirty-four per cent will use the proceeds of the sale of their business as a nest egg, while 19% will pass the business onto a family member.
This research follows a survey of Australians undertaken by MYOB last year which found 75% of Gen Z respondents are considering starting a business. Forty-one per cent find the idea of being their own boss appealing, while 37% want to move away from the 9 to 5. For 33%, it’s because they want to develop a passion or a project into something more.
While this generational shift presents an opportunity for ambitious young Australians, MYOB CEO Paul Robson explains that existing business owners need to ensure their business is primed for sale well in advance to meet the needs of future generations – and to ensure a healthy retirement for themselves.
“This wave of generational succession will create a shift in the way we define SMEs next decade. As Generation Z take the reins of this community, fuelled by rapidly diversifying technology solutions, the way we interact with businesses, the way we buy and what we buy from SMEs will be materially different in 10 years’ time,” said Paul.
“Ensuring your business is future fit will be essential for existing business owners, to maximise business performance and build wealth. Futureproofing comes in many forms, from integrating AI for efficiencies, to digitising more and evaluating product mix. A great place to start is a conversation with a trusted advisor, such as your accountant or financial advisor, who can provide focus for the optimal business plan.”
“Life can throw up unexpected challenges. The last thing a business owner needs when planning their successor is pressure to make a rushed decision,” says Chartered Accountants Australia and New Zealand’s Chief Executive Officer Ainslie van Onselen.
“Succession planning needs careful, gradual consideration, to align personal goals with a transition away from businesses that may have taken decades to build. Fortunately, succession planning is a mandatory requirement for all Chartered Accountants in public practice in Australia, so when it comes to giving advice, they’re walking the talk.
“Chartered Accountants can help you with everything from tax efficiency to staff retention, investment and continuity for yourself, clients and employees. There are a lot of options when it comes to succession – you may be surprised about insights a Chartered Accountant can provide, to both attract new owners and set yourself up for the future.”
The MYOB Bi-Annual Business Monitor found the greatest opportunity was with Baby Boomer business owners, who had the lowest update of digitisation within their businesses, with particularly low adoption of cloud-based solutions for processes like inventory management (9%), sales and marketing (12%) and employee management (19%).
“This next chapter is an exciting opportunity to see our freshest sector entrants gather their stride and lead the charge in Australian innovation. Previous generations can benefit from all the hard work they’ve put into their business by setting themselves up for a successful sale,” said Paul.
Founder and co-owner of OiOi Lisa Bennetts was designing luxury handbags when she gave birth to her daughter Isabella in 1998. Lisa saw a gap in the market for premium nappy bags, and OiOi was born.
Five years ago, Isabella joined the company and succession planning became top of mind for Lisa. Together, they shifted the business to an e-commerce-led model – now 70% of their sales – digitally proofing their homegrown business for the next chapter.
Isabella Bennett-Roberts, Director of OiOi, said: “It was never the plan for me to join my mum’s business—she started OiOi in 1998 when I was a baby. But after a few years in e-commerce, I saw huge potential in how OiOi could reach a new generation of parents. Since joining, we’ve shifted to an e-commerce-led model—now 70% of our sales—and the business is thriving.
“With Mum ready to step back, we’re exploring succession options that feel sustainable and play to our complementary strengths.”
Lisa Bennetts, founder and co-owner of OiOi, said: “OiOi is in Isabella’s DNA. What gave me the confidence to hand over parts of the business to her was seeing her combine that deep-rooted connection with solid expertise in business and marketing. She brings a youthful, inspirational energy that resonates with a new generation of parents, while respecting the legacy we’ve built. Watching her take the reins has been one of the proudest moments of my journey.
“I’m incredibly proud of her respect for the road travelled and her unwavering belief in where we’re headed.”
Collette Betts
Corporate Affairs Manager
About MYOB MYOB is a leading provider of cloud-based business management solutions with a core purpose of helping more businesses in Australia and New Zealand to start, survive and succeed. MYOB’s next-generation technology platforms deliver end-to end solutions for people and finance through to tax, supply chain, projects, employees and customers, empowering businesses with 0 to 1000 employees alongside a network of accountants, bookkeepers and consultants. For more information visit myob.com or follow MYOB on LinkedIn.