There’s two camps of business owners. Camp A: Those who, when the time is right, intend to exit their business—either by selling it on or passing it on to the next generation. And camp B: Those who simply don’t envision a world where they aren’t waking up and doing the work they love most.
The reality is that despite individual intentions, two in three Australians retire not by choice, but out of necessity. The top catalyst of retirement being an individual’s health or the health of their partner.¹. This illustrates the importance of having good financial plans in place long before you come close to your ideal age of retirement. For those in Camp B there is a huge psychological difference in working because you want to, knowing that you could walk away tomorrow because you are financially able to retire.
But where do you start? Here are the considerations every business owner should keep in mind, regardless of whether you’re champing at the bit to retire or not.
I regularly meet clients who confidently tell me they will never retire. Recently, I spoke with a client who is 70 years old and passionately insists he has no plans to stop working. While this is admirable, my role as an adviser is to gently remind you of an uncomfortable truth: retirement isn’t always your choice.
What if a day arrives when you simply cannot work anymore—due to illness, injury, or a significant change in circumstances? This is why catastrophe and capacity planning are critical. It's essential to consider the difficult questions early: "What’s the worst that can happen, and how can we best prepare for it?"
Without the right structures in place, a sudden inability to manage your business can create chaos—not just professionally, but personally and within your family. Everyone knows someone who has unexpectedly faced these circumstances, whether in farming or business. Unfortunately, many people resist believing this could happen to them.
My role is to keep these important conversations front and centre, ensuring you have the right strategies and structures in place. Planning for every scenario ensures peace of mind for you, your business, and those who rely on you.
If your intention is to sell, I cannot overstate the importance of getting early tax advice from a trusted expert. Understanding the potential capital gains implications and eligibility for small business concessions is essential—because it can have significant impacts.
A few years ago, I was speaking with a client about this very topic. They shared that their previous accountant had told them there was nothing that could be done about the hefty tax bill that would accompany their business’s sale. With their consent, we ran this matter past our internal tax advisory team. That second opinion resulted in our client saving $1.5 million at the time of sale, two years on—all because we got the right person and the right advice involved.
Selling a business is nothing like selling a house. There’s no real estate agent to swoop in and take care of it all for you. And even with a fantastic support network surrounding you, the process will demand a lot of you. You’ll be asking yourself a lot of questions—questions that only you can answer:
All of this is immensely stressful, and it’s piled on top of all the looming question marks that come with transitioning into retirement (which is very stressful in itself). As advisers, our job is to take the financial component of retirement off the table as a worry for you—making the finance side of retirement planning effective and easy to understand, so it’s one less burden our clients need to carry.
I think it is relatively easy to plan for your retirement financially. The difficult part will be what you plan to do in retirement – this often takes time and meaningful conversations to work out.
Often, our greatest value as advisers is simply knowing the right questions to ask. While it’s true that no one person has all the answers, I’d suggest that when it comes to planning the next phase of your business and life, no business owner has all the questions either.
I’ve experienced this myself. At one stage in my own business, it took insightful questions from a trusted mentor to steer me towards meaningful change. Just as I needed someone from outside my business to highlight considerations I had overlooked, my clients often don't know which questions they should be asking themselves. My role is to guide you by posing those important questions that haven’t crossed your mind yet.
Whether you intend to retire or not, it’s important to recognise that planning for retirement isn't about predicting exactly how your future will unfold. Rather, it's about making the right decisions to prepare you for whatever comes your way. One of the greatest parts of my job is staying involved in my clients' lives, so that I see all of our plans come to fruition.
If you’re starting to think about what’s next for you, get in touch with our team. We’d love to help you get the conversation started.
Sources
¹ Colonial First State, The Rethinking Retirement Report 2024.