November 13, 2023

Lack of exit planning may leave retiring business owners shortchanged

Resources Unearthed Business Exit Planning

A comprehensive 2023 report claims a ‘significant lack of exit planning will leave business owners shortchanged when they hand over the reins’ in the coming five to 10 years.

The Exit Smart survey has been conducted regularly by accounting firm William Buck.  Comparing the results from the 2023 survey to those from 2019 (i.e. pre-COVID) it seems little has changed with respect to being succession-ready. 72% of business owners in 2023, compared to 77% in 2019, have indicated they hope to exit their businesses within the next 10 years, however most of those surveyed have not had their business valued and the majority still have no formal exit plan in place.

And there was one other finding that really caught my eye…

Even though there has been a small improvement from 34% in 2019 to 38% of business owners in 2023 having formalised an exit strategy, most business owners surveyed are underprepared or have no exit plan at all.

Other continuing trends identified in the 2023 report include business owners who believe their key form of exit will be a trade sale (47% surveyed), although this is clouded by the fact that 44% of them are concerned about finding a buyer. Significantly, 19% have no idea who their buyer might be.

Outside of a trade sale, close to one third believe someone in their management will buy the business, while just over a quarter believe the business will remain in the family.

Not surprisingly impending retirement is the key driver for the majority of business owners wanting to exit their businesses.

On a positive note, some 65% of business owners believe they have adequate savings outside their business from which to fund their retirement.

However, as a tax specialist there was one finding that caught my eye that I found particularly troubling.

The survey revealed a concerning 59% of business owners surveyed had given no thought to the tax implications of their current business structure on exit.

This is a significant oversight that could mean exiting business owners lose a large portion of any business sale proceeds to tax.

While exit planning covers a broad range of issues, reviewing business structures that may not have kept pace with changes in the business or tax legislation should be a priority, along with understanding the potential tax costs of an exit and how these might be managed or minimised.

For business owners, especially those in the mining and resources industries, there can be inherent complexity often caused by the sheer size of the enterprise.

If you are among the cohort of business owners who are starting to think about retirement and what’s involved in exiting your business, I encourage you to get advice and begin planning now.  As the report reiterates, business exit planning generally takes three to five years.

Among your key planning tasks, arranging an independent business valuation is the among the first steps.

This not only will it take the guess work out of what you believe your business may be worth, it will expose its weaknesses so those areas can be improved. It will also identify strengths for capitalising on sale opportunities and identifying prospective buyers.

Preparing your business exit is a multi-pronged process which involves specialised tax and business advice, legal support and personal financial planning assistance that collaboratively manages the sale proceeds for your personal benefit, which is of course the whole point.

Should you have any questions or to request a 20-minute free discussion about exiting your mining and resources business or consultancy, please contact Craig Barry on +61 (0) 7 3007 2000 or email

Craig Barry is an accountant and specialist tax adviser who has worked with mining and resources clients for his entire professional life.  To learn more about Craig you can read his profile here.

Resources Unearthed is an information hub that connects senior executives, established professionals and business owners in mining & resources with proven specialist advisers.

Resources Unearthed is a solutions hub that connects senior executives, established professionals and business owners in mining and resources with proven specialist advisers.

*William Buck’s Exit Smart Report 2023 is an independent report that surveyed Australian and New Zealand small-to-medium business owners and c-suite executives, to measure their business’s level of exit readiness.  A copy of the report can be provided upon request from the William Buck website


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