WELLINGTON, Jul 23 (NNN-XINHUA) – Data from a survey of business owners shows, COVID-19 is continuing to cause private business owners in New Zealand to reconsider their succession plans.
Some 37 percent of respondents said, their exit strategy needs to be reconsidered, compared to 41 percent from the same survey conducted in May, 2020, after the first lockdown, according to survey, released today, by a New Zealand management consulting firm, Platform 1.
The number of business owners who said their succession plans would be delayed has decreased from 25 percent to 17 percent in 2021.
Coupled with this, over 60 percent of business owners surveyed, did not have a succession plan in place, which is an increase on the 48 percent from the 2020 survey.
“While owners may state their preferred succession option, many have no plan or a very loose plan and haven’t considered all the options available to them. The earlier they start thinking about it, the more options that are available” said Platform 1 Director, Mike Warmington.
The most common preferred succession solution was an outright sale, which was consistent at 30 percent across both surveys, although there was an increase in a gradual sale to a talented leader. Other options for succession, such as family, existing staff, or a merger were some of the options noted in the survey. 26 percent didn’t state any preferred succession solution against 25 percent in 2020.
There was still a strong response to bringing on board a capable person with capital, as a Business Partner, with 41 percent saying it would be a consideration compared to 48 percent in 2020.
Warmington said, “A talented external person with capital coming into a business, growing it, and gradually buying the owner out is increasingly seen as an option. Nobody has a crystal ball and a delaying approach from business owners may not be the best course of action, with talented people with capital ready now.”
One respondent in the anonymous survey commented:
“I think it has made me, as a business owner, realise that things can change quickly and there is a need to find an exit strategy that allows me to move out gradually while ensuring the business is able to continue to grow and do well for my employees”
“COVID-19 is still a disruption to business owners in 2021. 23 percent of business owners think that it may be more difficult to find a buyer within the next year. This is however more positive than in 2020, after the first lockdown” said Warmington.– NNN-XINHUA
