Aussie SMEs lag on exit strategy
Majority of Australian small-to-medium enterprises lack an exit strategy plan despite it being proven that an exit strategy can boost a business' sale price by three or four times, a business advisory firm said.
Business Exit Companion found 75 per cent of Australian SMEs did not have an exit plan, while a survey of over 17,000 businesses by Value Builder System revealed 88 per cent of business owners over 60 years old did not receive an investor offer for their business.
Business Exit Companion chief executive, Koos Kruger, said SMEs could be sitting on a retirement goldmine if they implemented the right strategy.
"Not using an exit strategy for a business sale is like going to auction with a rundown and messy house, or without marketing or advertising — you're guaranteed to achieve a significantly lower price," Kruger said.
PricewaterhouseCoopers predicted that around 1.4 million Australian business owners will retire over the next 10 years, with the majority likely to sell to sell their business rather than leave it to family.
The BizExchange Index showed businesses for sale jumped by 11 per cent over the March to June 2015 quarter.
Yet, Australian SMEs achieved significantly lower sales price earnings multiples across every category compared to the US or the UK.
"The concept of exit planning is not as widespread in Australia as it appears to be in other areas of the world," Kruger said.
AUTHOR
Malavika Santhebennur
Recommended for you
Insignia Financial has returned to profit in FY25, after a $185 million loss in the previous year, while its advice division grew their revenue per adviser by 14 per cent.
With licensee switching on the rise, particularly for newer advisers, compliance expert Sean Graham has shared red flags to watch out for when making the jump between AFSLs.
Beyond their investment benefits, over a third of advisers say utilising managed accounts solutions has allowed them to take on more clients, according to Praemium.
Insignia Financial’s wrap platform has appointed Heidi Press, former HUB24 head of product management, to spearhead the design and delivery of the MLC Expand platform.
