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Published on
13/08/2026
by Anybusiness.Com.Au
Australia’s $3.5 Trillion Retirement Sell-Off Has Begun, but Most Business Owners Are Not Ready
Almost half of baby boomer business owners plan to exit within five years, yet only 24% have a formal succession plan in place
Australia is approaching one of the largest transfers of business ownership in its history as thousands of baby boomer owners prepare to retire, but experts warn many could lose value because they have left their exit planning too late.
Baby boomers are estimated to own around 80% of Australia's small and medium-sized businesses, while approximately $3.5 trillion in assets and wealth is expected to pass to younger generations over the next two decades.
Research also suggests that 48% of baby boomer business owners plan to exit within the next one to five years, with 87% citing retirement as the reason.
Yet only 24% of SME owners have a formal succession plan in place, creating a growing divide between businesses ready to attract buyers and those that may struggle to sell.
Mary Tamvakologos, director of operations at Australian business buying and selling marketplace AnyBusiness.com.au, says the retirement wave has already begun, but many owners are underestimating how long it takes to prepare a business for sale.
She said:
"A large number of Australian business owners are reaching retirement age without a realistic succession or exit plan.
Many of these businesses are profitable and well-established, but they are still heavily reliant on the owner being involved in day-to-day operations, customer relationships and decision-making.
That reliance may have worked for decades, but it becomes a major risk when the owner wants to leave. Buyers are not only purchasing current revenue. They are assessing whether that revenue will continue once the founder is no longer there."
Owners risk reaching retirement with a business they cannot sell
For many SME owners, the proceeds from selling their business will form a significant part of their retirement income.
Research indicates that 34% of departing owners plan to use the money from a business sale as their retirement nest egg, while 19% intend to transfer the business to a family member.
Mary warns that owners who assume they will be able to list and sell quickly could face a lower valuation, limited buyer interest or no viable sale at all.
"Building a successful business does not automatically create a sellable business.
An owner may know every customer, supplier and process personally, but that knowledge has limited value to a buyer if none of it has been documented or transferred to the wider team.
If the business cannot operate without its current owner, the buyer is effectively purchasing a job with a significant amount of risk attached. That can reduce what they are willing to pay."
Mary says owners should ideally begin preparing for an exit several years before they plan to retire.
"Succession planning should not begin when an owner is already exhausted or ready to stop working. By that point, there may not be enough time to address the issues affecting value.
Owners need time to reduce their day-to-day involvement, strengthen the management team, clean up the financial records and demonstrate that the business can perform without them."
What the next generation of buyers wants
The expected increase in retiring owners could create significant opportunities for younger Australians who want to own an established business rather than build one from the ground up.
However, access to finance remains a challenge, particularly where the value of a business is based on cashflow, intellectual property, customer relationships and reputation rather than physical assets.
Mary said:
"This ownership transfer could give a new generation of entrepreneurs access to established businesses with customers, employees, supplier relationships and a proven trading history.
The difficulty is connecting prepared sellers with buyers who have both the skills and the financial backing to take over.
Lenders are generally more comfortable financing tangible assets such as property and equipment. Many successful modern businesses derive much of their value from recurring revenue, brand reputation, systems and customer relationships, which can be harder for a buyer to finance."
With more businesses potentially entering the market at the same time, Mary says buyers are likely to become increasingly selective.
"Buyers now look for documented systems, digital operations, cleaner financial visibility and processes that can scale beyond the founder.
The businesses attracting the strongest interest are the ones that can demonstrate operational stability and reduced founder reliance.
As more owners decide to sell, buyers will have greater choice. That means simply being profitable may not be enough. A business will need to show that its profits, customers and operations are genuinely transferable."
The seven signs a business is ready to sell
According to AnyBusiness.com.au, owners preparing for retirement should ensure they can demonstrate:
- At least three years of clear and current financial records
- Stable revenue that is not dependent on one customer
- Documented operating procedures and responsibilities
- A capable team that can run the business without the founder
- Transferable customer and supplier relationships
- Up-to-date contracts, licences and compliance records
- A realistic valuation supported by business performance
Mary added:
"Owners should ask themselves a simple question: if I stepped away for three months, would the business continue to operate successfully?
If the answer is no, the business is probably not ready to sell.
The owners who begin preparing now will be in a far stronger position to protect the value they have spent decades building. Those who wait until retirement is immediately upon them risk being forced to accept a lower offer, delay their plans or close a business that could otherwise have continued under new ownership."
Australia has approximately 2.6 million small and medium-sized businesses. More than 500,000 are owned by people aged 60 or older, according to figures cited by SmartCompany.
The succession-planning concerns have also been highlighted by Inside Small Business, which reported that many owners approaching retirement remain unprepared for the sale process.
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