Intergenerational report highlights changes coming for family businesses
06 March 2015
The release of the Intergenerational Report by Federal Treasurer Joe Hockey is a timely reminder for family businesses to look ahead and plan for economic and demographic change.
BDO National Leader, Family Business, Susan Rix said family businesses account for more than two thirds of businesses and many are expected to pass ownership down one or more generations over the next 40 years.
“The Intergenerational Report reminds all businesses to take stock of where they are headed in the long term and to consider the internal and external factors projected to impact their future, such as slower economic growth and a need to encourage and cater for greater workforce participation by women and older Australians,” Ms Rix said.
“For family businesses in particular, the ability to navigate the issues and opportunities around generational change and a multi-generational workforce can be critical to their continued success.”
Previous BDO research1 found 93 per cent of family businesses intend to transfer business wealth within the family, but only 39 per cent of family businesses had a complete succession plan in place.
“Successful wealth and knowledge transfer within a family business relies heavily on identifying a successor who not only possesses technical and leadership skills but also business and commercial acumen, as well as financial responsibility,” Ms Rix said.
“Considering that by the mid-2050s, our current 15-25 year olds will likely be at the helm of many family businesses, the question is whether this generation is ready and able to navigate the business and economic changes forecasted by the Intergenerational Report.
“This generation is also one currently grappling with issues like housing affordability, changing family dynamics and the likelihood of working longer than any other generation before them.
“Preparing and supporting the next generations so they can negotiate both personal and economic challenges successfully will be key to ensuring a bright future for Australian family businesses.”
1 The BDO Family Business Wealth & Knowledge Transfer Report