Selling to an outside buyer involves negotiations about price, risk and performance. Passing a business to your child brings those decisions into the family, where love, expectations and history can make the hardest questions difficult to ask.
Australia is expected to see $3.5 trillion in wealth pass between generations over the next two decades.
Family businesses are part of that story. Yet only 19 per cent of family businesses have a documented succession plan, according to the 2025 Grant Thornton Family Business Report. When planning lags behind, illness, conflict or retirement can force decisions that needed years of preparation.
In Short
- Massive wealth transfer: Australia is set to see $3.5 trillion pass between generations over the next two decades, yet only 19 per cent of family businesses have a documented succession plan.
- Honest conversations are vital: Parents must openly discuss their child's willingness and readiness to take over the business to avoid future conflict or resentment.
- Early preparation is key: A successful handover requires years of mentoring, documented timelines, and independent expert advice to ensure a seamless transition.
Two patterns I’ve seen
Across forty years in business and property, I’ve seen two patterns cause particular harm.
The first is a child who takes over a good business out of obligation. They may be capable, but they don’t want the life that comes with running it. Neither generation asks directly: the parent fears rejection; the child fears causing disappointment.
The second is a willing successor who never gets a proper chance to learn. A parent holds on to key decisions, delays handing over responsibility and then concludes the child isn’t ready. Readiness requires mentoring, genuine responsibility and time.
I’ve also seen what can happen when parents decide their child cannot take over and rush to sell. In one case, the business sold at a reduced price, alongside a long lease at below-market rent. That lease also reduced the property’s value. Years later, the children still regretted how the decision was made. A sale may be the right outcome, but its terms need careful thought when the family owns both business and property.
Ask the honest questions early
Does your child want to run the business? What skills do they need? How will other children be treated fairly? An honest answer might lead to a different structure: the family retains ownership while an experienced manager or trusted employee runs day-to-day operations.
Put decisions into a clear process
A handover needs more than a promise around the kitchen table. Document the timetable, training milestones, responsibilities and conditions for transferring ownership. Agree on who decides what, and what happens if the successor changes their mind.
An independent adviser can help raise questions the family finds difficult to discuss. Seek legal and tax advice before transferring shares or property, especially where other family members or shareholders are involved.
Give the transition enough time
A rushed handover can leave the next generation with a business that still depends on the parent for customers, pricing and daily decisions. Starting several years ahead lets you strengthen systems, test the successor’s readiness and adjust the plan.
If you stepped away tomorrow, would the business keep running? Have you asked your child what they truly want? Have you considered what a sale, and any lease attached to it, would mean for the property as well as the business?
I cover many more examples in my book – The Transition Edge: A Guide to Exiting Your Business and Property on Your Terms – Available on Amazon:
Family succession works best when these questions are answered openly, while you still have choices.
Ready to plan your business transition? Take the 5-minute Business Transition Readiness Test or contact Con Tastzidis at CST Properties for expert guidance on the North Shore.
