Small business makes up over 97 per cent of Australian enterprises and are drivers of innovation and growth. Yet most will not be passed on to a new generation within the family, raising questions on succession and retirement that are often not addressed. 

The old tradition of passing on the family business has increasingly been complicated by younger generations wanting to pursue their own careers, often in new age industries, and by the rising number of rules and regulations that add to the complexity of running a business. 

With only about one-third of business owners having a documented plan for transferring their wealth, and about an equal number having a trusted advisor to help guide decisions, there is a clear need for more business owners to turn their attention to wealth transfer, but also their own capacity to retire with the funds they need to achieve their desired lifestyle. 

Saving for retirement can be made more difficult when there is no clear delineation between the business and personal finances. Only about 20 per cent of business owners feel confident about their savings capability, and about 25 per cent expect their business to liquidate on their retirement, according to research conducted by NAB Private Wealth and Core Data and released this week in the Beyond the Business report. 

Michael Saadie, NAB Private Wealth Executive, said nurturing small businesses was not just vital for the 2.6 million enterprises in Australia, but also the 5.3 million people they employ. 

“These businesses make up one-third of our economy, making the wealth they create an important ingredient for the health of the nation”, said Saadie. “This also translates into retirement, as for governments to deliver the services the country needs, there must be a sufficiently large pool of self-funded retirees going forward to cope with the reality of an aging population.” 

A compelling insight that has emerged from the research is the idea that full retirement is often not contemplated by the current crop of business owners. For some it’s a financial decision, but for majority, the desire to maintain contact with the business evolves around keeping their mind active, continuing to enjoy the work they do, or for the social interaction. 

The Beyond the Business report also shows that emotions are intertwined with both succession and how the transfer of a business to a new owner or its liquidation is handled. “Financial professionals supporting clients through this period need to be mindful not just of the financial considerations, but also the emotions that may be generated”, said Saadie. “At the end of the day, you just want to be able to say it was good outcome, and the family is looking with optimism to the future.” 

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Important information 

The information contained in this article is believed to be reliable as at April 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. 

©2025 NAB Private Wealth is a division of National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.