The Succession Cliff: What the Data Says, and What I Say to Clients
Recent research puts a number on something I see in almost every second client meeting: close to a third of Australian small business owners plan to retire within the next five years, and only a small fraction of them have an actual, documented plan for what happens next.
That gap isn’t an abstract statistic to me. It’s a conversation I have on repeat.
Our own state government has a whole page dedicated to exit and succession planning because the problem is real enough that South Australia felt the need to spell it out step by step: find your successor, value your business, put a plan in place, keep it current. Good advice. Rarely followed.
Why owners avoid the conversation
I don’t think it’s laziness. I think it’s avoidance, and it’s an understandable kind.
Succession planning forces you to admit two uncomfortable things at once. First, that the business won’t run forever with you at the centre of it. Second, that the person you’d naturally want to hand it to might not be the right person to hand it to.
Neither of those is a fun conversation to start. So most owners don’t start it. They keep building, keep working, and tell themselves there’s time. There usually is, until there isn’t.
The farm version of this problem
For our agribusiness clients, the stakes are sharper, because the asset isn’t just a business. It’s land, equipment, a family identity, sometimes multiple generations of it.
Research out of Charles Sturt University looked closely at current practices in Australian farm succession planning and found that close to half of Australian farmers hadn’t identified a successor at all. The same research pointed out that most farmers don’t start seriously thinking about retirement until they’re already in their fifties, which doesn’t leave much runway for a transition that, done properly, takes years.
This isn’t a niche problem. It’s common enough that the Grains Research and Development Corporation, working alongside Meat & Livestock Australia and other rural research bodies, publishes a free resource on it: A Guide to Succession: Sustaining Families and Farms. When an industry research body feels the need to produce a dedicated guide, that tells you how widespread the gap is.
It's not just farms
The same pattern shows up in family businesses more broadly, retail, trades, professional services. Family Business Australia’s own survey work found that a large share of family businesses either don’t have a documented succession plan, or have one that exists more as an intention than an actual plan on paper. Most of these owners genuinely want to keep the business in the family. Wanting to isn’t the same as having a plan to make it happen. You can read more about their findings here.
This isn't estate planning. It's business continuity.
Here’s where I think a lot of owners misfile this problem. They treat succession planning as something adjacent to their will, a legal box to tick eventually.
It’s not. It’s a business continuity question. What happens to your cash flow, your staff, your customers, and your reputation if you’re not there tomorrow? What happens to all of that if you retire in five years without a plan?
It’s a big enough problem that our banks are talking about it too. Commonwealth Bank’s own newsroom, drawing on ABARES farmland price data, pointed out that broadacre farmland values have climbed at an average of over 10 per cent a year for the past decade. That’s not a side note. It means the asset being handed down is worth substantially more than it was even five years ago, and the plan for handing it down needs to keep pace.
Equal isn't the same as fair
This is where most of the difficulty actually sits, and it’s the conversation I have most often with farming families specifically.
You love your kids equally, so splitting everything equally feels like the obvious, fair thing to do. But a farm isn’t a bank account you can slice into identical pieces. An even split can leave the business too small, or too loaded with debt, to actually keep running.
Equal means everyone gets the same slice. Fair means everyone is looked after, without destroying the thing you’re trying to pass on in the first place. The child who stays on and farms is taking on the work, the risk, and the debt. The children who leave still matter too, and there are good ways to look after them, education, a parcel in their name, a payout funded over time, without carving up the land itself.
Before you default to equal, ask the harder question: what’s actually fair to everyone, including the business itself?
Where to start
If you haven’t started this conversation yet, you don’t need to solve the whole thing in one sitting. The federal government has a free succession plan template that walks through the basics: who might take over, what the business is actually worth, what the transition looks like operationally and financially.
Filling that out honestly, even roughly, will tell you more about where you stand than another year of putting it off.
Take the next step
Talk to an advisor
If that question feels heavy, that’s normal. It’s exactly the one we help families work through, on farms and in family businesses more broadly. The earlier you start, the more options you have and the better the outcome tends to be for everyone at the table.