As nearly half of small business owners approach their final decade at the helm, Australia is bracing for a historic transfer of ownership that will test succession plans and family readiness—writes Michael Saadie, executive of NAB Private Wealth and CEO JBWere.
Across the business landscape, an evolution has begun. The traditional dream of building a business to pass down through generations is dissolving and being replaced by something more complex. Our latest research report, conducted in collaboration with market intelligence firm CoreData, reveals that only 39 per cent of small business owners expect their children to take the reins—a seismic shift from the succession ambitions that once defined business ownership.
This is not merely statistically significant. With small businesses (defined as those employing fewer than 20 people) accounting for a third of national GDP and employing over 5.3 million people, we are witnessing a reimagining of how wealth, purpose and legacy intersect in modern life. The implications go beyond balance sheets into how we define and conceive success, retirement and family prosperity.
BECOMING UNANCHORED
Within the wealth management sector, conversations are evolving. Where we once discussed tax structures and asset allocation, we now find ourselves grappling with questions of identity, purpose and fulfilment.
One client recently described selling their business to a US private equity firm as “like winning the lottery”, but that excitement was overshadowed by disorientation and a peculiar sense of mourning. After two decades building a 12-person operation into a thriving global enterprise with more than 120 employees, they found themselves untethered. The business was not just their wealth creator, it was their daily driver and social ecosystem. While these discussions consume our advisory sessions, the policy response remains behind the curve.
The numbers tell a sobering story: nearly half of Australian small business proprietors are aged over 50, with 22 per cent just five years from pension age. Even so, only 34 per cent have a documented succession plan. Another 31 per cent have discussed plans without formalising them, while 20 per cent keep their intentions entirely to themselves. This is not procrastination—it is paralysis in the face of fundamental questions that numbers alone cannot answer.
THE PULL OF DIFFERENT TIDES
Why are the children of successful businesspeople increasingly stepping away from the family business? The answer lies partly in the vast range of alternatives that beckon from every corner of our evolving economy. The tech sector’s appeal, with its promise of scale, offers emerging talent the chance to build billion-dollar valuations without the decades of hands-on management that their parents endured.
With young professionals drawn to inner-city innovation hubs, the industrial and regional areas where many family enterprises operate feel increasingly remote, geographically and culturally. The inherited logistics company in the suburbs, however successful, struggles to compete with the allure of a CBD startup or global consulting firm.
We are also witnessing a generational shift in how success is defined. Where their parents measured achievement and success in revenue growth and market share, millennials and gen Z prioritise flexibility, purpose and impact. The prospect of inheriting the family firm can be less appealing than launching a sustainable fashion brand or joining a climate tech venture, for instance.
HALF-SPEED AHEAD
Traditional retirement—that significant moment when one stops working entirely—is becoming as outdated as the farewell morning tea. Our research reveals that 54 per cent of small business leaders plan to be partially retired but working by choice at 67, with another 29 per cent expecting to work full-time by choice. This is not driven by financial necessity, but by something more fundamental.
I call this ‘punctuated retirement’: a deliberate, flexible transition that maintains intellectual and social engagement while shedding the management burden. It is about preserving what energises while removing what exhausts. Most of the survey participants cite intellectual stimulation as their primary motivation, with enjoyment and purpose close behind.
This shift demands sophisticated wealth strategies. At NAB Private Wealth, we are seeing clients design complex structures that allow them to retain strategic involvement while delegating day-to-day control. They are building portfolios of non-executive directorships or channelling their expertise into philanthropic initiatives.
SPREADING THE SAILS
Perhaps no challenge is as acute as the ‘empire mindset’ that keeps wealth dangerously concentrated. Business owners naturally gravitate toward what they know, often maintaining most of the family wealth within their company. It is familiar, it is controllable, and it has worked so far. The burden of being solely responsible for revenue has also made many afraid to look beyond the business. But this concentration creates its own challenges.
The adviser’s role has transformed from simply recommending diversification to becoming a translator between the familiar and unfamiliar. We must explain how a diversified portfolio spanning public markets, property and alternative investments provides not only risk mitigation but also the liquidity needed when the next generation requires capital for their own enterprises or property purchases. This is particularly critical given that over half of businesses with revenues exceeding $200,000 hold commercial property or high-value assets, often illiquid and difficult to partition among beneficiaries.
CHARTING THE COURSE
The key is starting important succession conversations years or even decades before handover. When company structures are properly established from inception—with clear separation between personal and business assets, appropriate trusts and tax-efficient vehicles—the eventual transfer becomes more seamless and less complex.
Family discussions should begin early, allowing friction points to surface and resolve well before any transfer of leadership or the commencement of sale negotiations. Through our private banking network and JBWere’s family advisory services, we facilitate these often sensitive discussions in confidential settings where discretion is paramount. We also host networking events which bring together business owners facing similar transitions, creating safe spaces for sharing experiences and strategies.
With a quarter of businesses set to close upon their owners’ retirement, we are witnessing the end of automatic succession and the beginning of something deliberate and meaningful. Modern legacy surpasses company continuity, extending to embrace philanthropic endeavours, impact investing and social enterprise.
This legacy planning process begins with essential questions: What is the purpose of this wealth? What world do we want for future generations? Once families answer these questions, many discover new paths forward. We observe founders channelling their entrepreneurial energy into venture philanthropy and multigenerational foundations to create new forms of family unity without shared business operations.
Employee buyouts are among the solutions now emerging, allowing executives to reward loyal teams while ensuring business succession. These structures preserve local employment and community engagement while freeing founders to pursue new challenges. It is inheritance reimagined, enabling future prosperity rather than dictating its terms.
PREPARING FOR THE WAVE
Looking ahead, we face an unprecedented wave of ownership transfers. With the number of small businesses having doubled over the past 25 years to 2.6 million, and baby boomers approaching retirement en masse, we need robust infrastructure to facilitate smooth succession. This requires creating frameworks that support emotional, financial and practical transitions simultaneously.
The current reality, where only 30 per cent of small business owners maintain ongoing relationships with financial advisers, suggests many people are incredibly underprepared. The complexity of 21st-century succession demands coordination across private banking, wealth advisory, tax planning and family counselling. NAB Private Wealth brings together business bankers, private bankers and wealth advisers from the very beginning. This collaborative, end-to-end approach, supported by JBWere’s investment advisory, nabtrade’s self-directed platform and NAB Ventures’ innovation ecosystem, helps ensure seamless support across business, financial and personal planning.
We also recognise that women will be among the largest beneficiaries of the upcoming wealth transfer. This drives our continued investment in female advisers, who are a critical part of our team and well placed to serve this demographic.
CATCHING NEW WINDS
In working with and supporting entrepreneurs, I have observed that many find their post-exit ventures more fulfilling than their original businesses. Freed from daily pressures and armed with capital and experience, they are funding innovation, backing tomorrow’s leaders and pursuing meaningful causes with characteristic determination.
Rather than viewing the move away from traditional succession as a negative trend, we see important progress toward increasingly flexible and impactful forms of legacy. For those willing to plan early, diversify thoughtfully and reimagine retirement, this transition represents not an ending but a beginning.
Our thoughts around succession are changing because the world is changing. The question is not whether to adapt but how quickly and thoughtfully we can build new models that honour both achievement and aspiration, serving not just the generation that built wealth, but also those who will build differently.
In this great unbundling of business and family, opportunities abound.
Read the full Beyond the Business: Navigating Retirement and Succession for Small Business Owners report at business.nab.com.au/life-beyond-your-small-business
This article has been prepared by National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 (NAB). The information contained in this article is believed to be reliable as at September 2025 and is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, property, financial and taxation advice before acting on any information in this article. All products and services mentioned in this document are issued by National Australia Bank Limited ABN 12 004 044 937, Australian Credit Licence and AFSL No. 230686 (NAB), except wealth advice services, which are provided by JBWere Limited ABN 68 137 978 360 AFSL No. 341162 (JBWere), and nabtrade, which is the information, trading and settlement service provided by WealthHub Securities Limited ABN 83 089 718 249 AFSL No. 230704 (WealthHub). WealthHub and JBWere are wholly owned subsidiaries of National Australia Bank Limited (NAB). WealthHub’s and JBWere’s obligations do not represent deposits or other liabilities of NAB. NAB does not guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer. You may be exposed to investment risk, including loss of income and principal invested. ©2025 NAB Private Wealth is a division of National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.