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I own a light manufacturing business.
What are the succession options open to me?

There are a number of options open to you, especially if you don't have an urgent time-pressure. However all the options available are essentially variations of one of the 5 main options being:
  1. Sell to an external party
  2. Sell to family members - generational succession
  3. Sell to management - MBO
  4. List the company on the stock exchange
  5. Structured liquidation

What is the best succession option?

The one that meets your needs. That answer may sound trite but there is no single right answer. Succession is about achieving the desires of a business owner and there will be as many variations on that as there are business owners.

It seems to me that people are scaremongering about this so called succession threat probably just so that they can charge a lot of professional fees. Businesses have always come up for sale so what is the big difference now?


The big difference we have looming now is as a result of the demographic changes taking place in New Zealand over the next few decades. New Zealand, like many other western nations, has a reasonably rapidly aging population. This is especially due to the baby boomer phenomenon which was a post war baby boom coupled with declining birth rates since the early 1970's. A large number of businesses in New Zealand were set up and are currently owned by baby boomers many of whom are starting to reach retirement age. This means that we have a large number of potential businesses coming up for sale with a smaller group of potential buyers.

Add to this the recent phenomenon of market convergence - larger businesses swallowing up smaller ones and driving down the costs to consumers which makes it even harder for smaller players to compete.

Rather than "scaremongering" as you put it this is more about being aware early that the playing field is changing. And as with any change, those who are prepared stand to be best placed to benefit from it. In this case those with the best dressed (best prepared) businesses are likely to be best placed.

ASB creating futures.