This succession is important too

Privately owned businesses are collectively worth $1.437 trillion, yet more than eight out of 10 owners have no plans for who'll take over the reins

- Anthony O'Brien

Running a small business is hard work, but for many owners it’s a labour of love that allows them to hand over a valuable asset to the next generation of family members. For others, their business holds the capital for a rewarding retirement.

Despite the value of an enterprise in an owner’s future plans, 83% of owners leave things to chance with no formal succession plans in place.

Craig West, founder and executive chairperson of the business services firm Succession Plus, says most owners give little thought to preparing for a successful exit from their business. It’s an oversight that can have serious financial repercussions.

A recent report by Capitaliz shows that the total value of Australia’s privately owned businesses is $1.437 trillion (the average is $605,079). But the ‘value potential’ – the gap between the current value versus the potential value – currently sits at $432 billion (or $182,000 each).