Family business owners are set to face an increasingly tough time planning out leadership exchanges, according to a new survey.
The Australian Family and Private Business Survey was commissioned by business solutions specialist MGI Australasia and saw the participation of over 5,000 executives from disparate companies.
It found that the majority of firms covered had not considered the selection of a new leader to be a "critical issue" despite the advancing age of many executives.
In fact only 25 per cent of respondents indicated that this estate planning activity was to be undertaken in the immediate future.
This result could be due to the presiding economic conditions faced by smaller businesses over the last few years, as MGI Australasia's executive chairman Sue Prestney explained.
"The impact of the global financial crisis, lack of motivated buyers, time needed to undertake succession planning or preparing to sell, or just the postponement of difficult family decisions," said Prestney.
With the survey showing that more than one third of family-owned businesses were managed by individuals aged between 40 to 59 years old - and up to one quarter between 60 and 69 years of age - the director said that the matter would become increasingly important over the next decade.
Prestney explained: "It is crucial that the threshold issues of whether to exit via a sale or family succession is determined well in advance of the desired exit date.
"This will enable the business owner to implement the most appropriate exit strategies for the particular exit option."
On top of these findings, the survey revealed that a majority of respondents had already made plans for their retirement, but few felt the business was in a position to be passed on to new management.
In addition, MGI's report showed that nearly 66 per cent of current managers felt that their children were not interested in running the family business.
"Any decision should be in the best interests of the current owner and the family as a whole," said Prestney.
"It must also take into account the retirement funding required by the current owner and whether the likely successor will be able to enhance the current value of the business."
In cases where a firm is run privately, the ownership can be passed on directly through a will or property settlement agreement - as it effectively forms part of a person's estate.