Family Business Blog
Oct 12, 2006
2006 MGI Family Business Survey
The recently completed MGI Australian Family & Private Business Survey (*) indicates some interesting new trends which question the future direction of family business.
This report, which follows up previous surveys (1997 & 2003) by Prof Kosmas Smyrnious and the Family Business Resource Centre's Lucio Dana, point to some interesting changes in direction.
Among the key findings —
This report, which follows up previous surveys (1997 & 2003) by Prof Kosmas Smyrnious and the Family Business Resource Centre's Lucio Dana, point to some interesting changes in direction.
Among the key findings —
Preferred Exit Strategy
One of our key themes when working with families in business is to ‘ensure that the business is always sale ready’. This is borne out by the survey which found that—
- 75% would seriously consider selling their business if they received the right offer and
- 53% of family business owners see the sale of their business as their preferred exit strategy.
Where to family business?
The survey also indicates that less than 25% of family businesses are committed to passing the business to future generations23% — Definitely want to remain a family business
- 33% — 1st preference – continued family ownership
- 27% — Continued family ownership is not important 1
- 7% — No specific policy regarding future ownership
Planning for Succession
Although 79% of family businesses regard succession planning as important, 80% do not have documented management succession plans and 75% do not have documented ownership succession plans.
Retirement Funding & Superannuation
Given that 84% of CEO’s are planning to retire in the next 10 years, it was interesting to see how they planned to fund their lifestyle in retirement —
Key Business Objectives
The following responses were received when family business owners were asked what their principal objective was —
- 72% — Have an adequately funded retirement program
- 50% — Retirement will be funded by superannuation
- 25% — Believe that superannuation is inadequate
- 31% — Retirement will be funded by sale of business
Key Business Objectives
The following responses were received when family business owners were asked what their principal objective was —
- 34% — Accumulate family wealth
- 20% — Increasing business value
- 27% — Business growth and profitability
- 6% — Passing the business on to the next generation
- 4% — Employing family members
In summary
Though 84% of owners would like their businesses to be exit or succession ready, over half of them do not think that they currently are. We need to look at this in conjunction with the impending transition and the emphasis on wealth creation and business growth. So it looks as if there is still a fair bit of work to do to get businesses into shape and ensure that retirement lifestyle objectives are achieved.
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