Brisbane’s business community is vibrant and resilient but beneath the surface many owners sit on a ticking time-bomb. They have poured decades of effort into building companies that feed families employ locals and contribute to the Queensland economy. Yet most of these owners have no documented path for stepping away. When retirement health issues or unexpected life events arrive chaos can follow. This article uncovers why the succession gap exists explains the legal backdrop and offers a practical ninety-day roadmap that any Brisbane owner can start today to protect both wealth and legacy.
The Brisbane succession landscape
Australian Bureau of Statistics figures show almost half of small and medium enterprises are controlled by people born before nineteen sixty-five. Applying that national ratio to the Brisbane Local Government Area suggests more than twenty five thousand enterprises will need a leadership change within the next decade. Pitcher Partners mid market research indicates that only one quarter of owners hold a formal written exit plan. The remainder rely on hopeful assumptions that family members will step up or that a willing buyer will appear.
The city has a higher proportion of family run firms in construction hospitality and professional services compared with southern capitals. Those sectors often blend personal and business finances which complicates a transition. Property values have climbed strongly across south-east Queensland so many owners believe the sale of real estate will fund retirement but they underestimate transaction timing taxation and regulatory duties.
Grant Thornton’s family business report shows that thirty per cent of next generation candidates prefer independent careers rather than inheriting the firm. That trend adds fresh urgency. Without a structured plan key employees may depart suppliers might lose confidence and the value of the enterprise can fall quickly once rumours of an uncertain future spread.
The risks of having no exit plan
Failure to prepare leads to both financial and personal consequences. From a financial viewpoint lack of planning can reduce sale price by up to forty per cent according to the CEO Institute survey of two hundred Australian shareholders who completed transactions between twenty twenty and twenty twenty-three. Buyers discount firms that depend heavily on the departing owner because intellectual property and client relationships may walk out the door with them.
Tax efficiency evaporates when owners scramble at the last minute. The small business retirement exemption under section one hundred eighteen dash three hundred of the Income Tax Assessment Act nineteen ninety-seven allows up to five hundred thousand dollars of capital gain per stakeholder to be disregarded. Claiming that relief requires early structuring and documentation. If an owner misses eligibility tests the tax bill on a two million dollar gain could exceed four hundred thousand dollars.
Personal stress also spikes. Stakeholders including spouses and adult children can face uncertainty about income continuity. Employees may seek other jobs. Long-term customers may test competitors. Litigation risk rises if shareholders disagree on valuation or timing. Non compliance with director duties in sections one hundred eighty to one hundred eighty four of the Corporations Act two thousand one can even trigger civil penalties and disqualification.
Understanding the legal and regulatory foundations
A solid exit plan aligns with several layers of law and guidance. At federal level the Corporations Act sets governance obligations. Section two hundred one A requires at least one director at all times which means the plan must nominate a successor or corporate trustee. Section two hundred one B outlines director qualifications which prove vital when selecting a new leader.
Tax law shapes the financial framework. The Income Tax Assessment Act covers concessions such as the fifteen-year exemption and the active asset reduction. Applying those concessions needs detailed records often stretching back more than a decade.
Superannuation rules under the Superannuation Industry Supervision Act nineteen ninety-three allow benefits to flow upon death or incapacity but only when the trust deed and binding nominations are up to date.
Queensland’s Succession Act nineteen eighty-one governs wills and estate distribution. Any exit roadmap that includes passing shares through a deceased estate must integrate the Act’s requirements.
Regulators enforce these laws. The Australian Securities and Investments Commission can prosecute governance breaches. The Australian Taxation Office reviews concession claims and can apply penalties and interest. The Australian Prudential Regulation Authority oversees superannuation compliance. An owner who overlooks these agencies risks costly disputes.
The ninety day exit blueprint
Time pressure may feel overwhelming yet ninety days provide a realistic window to lay the groundwork. By tackling focused tasks across three phases owners create momentum that protects value and sets a longer term pathway.
Days one to thirty Audit and valuation
The opening month revolves around clarity. The owner gathers financial statements customer contracts employee agreements lease documents and intellectual property registers. An external accountant applies normalised earnings analysis to establish a baseline valuation. Concurrently a governance review checks director registers and share certificates ensuring compliance with the Corporations Act. Family members and key managers meet privately to discuss personal goals and appetite for succession. This dialogue uncovers whether an internal transfer or external sale aligns with the group’s preferences.
A risk audit identifies dependencies on the owner. For example if the founder signs off on every construction tender that task must shift to a project manager. Simple process mapping highlights those choke points.
Days thirty one to sixty Preparation and enhancement
With valuation drivers understood the next thirty days focus on removing obstacles. Accountants separate personal expenses from company books boosting credibility. Lawyers draft or update shareholder agreements including buy sell clauses funded by insurance where suitable. Marketing teams document customer engagement procedures so goodwill is transferrable.
Technology plays a central role. Many Brisbane firms still run legacy desktop accounting software. Migrating to cloud platforms creates transparent real time data for due diligence. Cyber security policies are strengthened to satisfy buyer or investor scrutiny.
Training programs mentor potential leaders. Even if the final successor is unknown elevating capability among senior staff assures continuity. Insurers review key person cover to protect cash flow should the founder exit suddenly.
Days sixty one to ninety Marketing and transition
The final phase converts preparation into action. If an internal successor is ready lawyers draft a staged transfer deed that aligns with the Succession Act and the Income Tax Assessment concessions. Settlement dates, payment terms and performance hurdles become clear. Where an external sale suits better a confidential information memorandum summarises the audited data and growth story.
Advisors approach a short list of strategic buyers often local firms seeking scale. Alternatively private equity groups with Brisbane offices look for bolt-on acquisitions in health services technology and niche manufacturing. The owner remains available for management meetings but allows advisers to lead negotiation.
Parallel to sale activities estate lawyers update wills and enduring powers ensuring share holdings pass smoothly if unexpected events arise before deal completion. Superannuation death benefit nominations receive the same attention.
Brisbane specific strategies for different exit paths
Not every plan ends with a straight sale. The city’s economy supports varied structures. Some family enterprises adopt a phased gifting model triggering no immediate tax when shares transfer to children who work in the firm. Others favour a management buyout funded through local banks that recognise the stable cash flow of established Queensland brands.
For owners in hospitality and retail the premises lease often drives valuation. Negotiating lease extensions with favourable terms before marketing the business can lift the sale price markedly.
Professional services partnerships use equity retirement provisions that obligate remaining partners to purchase departing stakes at a formula price. The ninety day blueprint can still apply by compressing valuation agreement updates and funding arrangements into the timetable.
Mergers provide another path. Two engineering consultancies in Fortitude Valley recently combined to pool staff and win larger infrastructure contracts. The transaction succeeded because both parties completed operational audits and harmonised software platforms before signing heads of agreement.
Real Brisbane stories wins and warnings
Consider the case of a southside manufacturing owner who planned to retire within six months. Without any clear roadmap he entered informal talks with a competitor. Due diligence uncovered that equipment maintenance logs were handwritten and incomplete. The buyer reduced the offer by twenty percent and inserted a twelve month earn-out condition.
Contrast that with a north Brisbane childcare operator who engaged advisers a full year ahead but still executed key tasks inside ninety days. She converted accounting to Xero, documented staff training processes and renewed the facility lease. The sale attracted four competing bidders and settled within eighty five days of listing at a valuation multiple one point three times higher than the industry average.
Another example involves a family-owned legal practice where two siblings disagreed on future involvement. A facilitator led structured meetings during phase one of the blueprint. They agreed one sibling would purchase the other’s equity using vendor finance over three years. By documenting the arrangement through a binding shareholder agreement they avoided potential litigation.
Key data at a glance
| Metric | With Documented Plan | Without Documented Plan |
|---|---|---|
| Average sale price for Brisbane SMEs (EBITDA multiple) | 4.2 | 3.0 |
| Average transaction period (months) | 8 | 15 |
| Probability of staff turnover within six months post-settlement | 12% | 37% |
| Average capital gains tax saved using small business concessions | $220,000 | $0 |
| Percentage of deals falling through at due diligence stage | 18% | 52% |
The table draws on aggregated data from Pitcher Partners, CEO Institute surveys, and ABS small business exits between two thousand nineteen and two thousand twenty-three.
Frequently asked questions
How long does an exit usually take
Many advisors recommend two to five years. In practice motivated owners who follow a disciplined process can achieve a well prepared exit in twelve months. The ninety day blueprint does not complete every legal or tax step but it builds a solid foundation that makes a twelve month horizon achievable.
What if there is no family successor
If children or relatives show little interest owners can groom senior managers, structure an employee share plan or pursue an external sale. Early identification saves time and reduces emotional strain.
How does capital gains tax apply to a sale
The gain equals sale proceeds minus cost base. Small business concessions can exempt some or all of the gain if turnover and asset thresholds are met and the shares or assets have been active for at least fifteen years in some cases. Proper accounting records and valuations are essential to prove eligibility.
Is a ninety day timeline realistic
Yes when focusing on groundwork rather than signing final contracts. By auditing records, improving governance and opening communication with successors or buyers within the ninety day window owners raise enterprise value quickly and reduce risk.
Your next step toward a secure legacy
A business exit should feel like a celebration not a crisis. Brisbane owners who act early enjoy higher valuations, lower tax bills and smoother handovers. The ninety day blueprint outlined above provides a clear starting line. Gather your advisers, commit to the timetable and watch the pieces fall into place. Your employees, customers and family will thank you and the legacy you built will continue to thrive across Queensland long after you step away.
