• A fortnightly business advice column by Whakatāne accountant and business adviser Jason Lougher

New Zealand has the oldest small business ownership profile in the Asia-Pacific, and the Eastern Bay is no exception. What happens to our commercial fabric when the current generation of owners steps back?

Walk down the main street of almost any town in the Eastern Bay and take a quiet look at who is behind the counters, running the trades businesses, and holding the keys to the warehouses. Then ask yourself: who comes next?

It is a question New Zealand’s business community has been slow to face, and the numbers make uncomfortable reading.

Nationally, 68 percent of small business owners are aged 50 or over, compared to a regional Asia-Pacific average of just 30 percent.

In the same data set, nearly a quarter of all business shareholders are 60 or older. Up to 10,000 New Zealand businesses are expected to change hands in the next five years, and experts estimate that poor succession planning could erode up to $3.5 trillion in business wealth over the coming two decades.

That is a national story. But it plays out locally, one business at a time. And in a community like Whakatāne, the stakes are higher than mere dollars. Our businesses are the social connectors that keep a town alive: the café where everyone knows your name, the plumber who turned up in the storm, the accountant who has been doing your books since your parents ran the place. When those businesses close without succession plans, something harder to quantify is lost along with the revenue.

The planning gap

The difficult truth is that most small business owners in New Zealand have not written a succession plan. Research consistently shows that the majority intend to sell eventually, but intention and preparation are two very different things.

Twenty percent of business owners are planning to sell within two years, yet the average time to properly prepare a business for sale is three to five years. The maths does not work in their favour.

What does “not being prepared” actually cost? Quite a lot, as it turns out. A business sold in haste, without documented systems, a clear management structure, or a groomed successor, will typically sell for significantly less than one that has been deliberately prepared.

Buyers pay for certainty. An underprepared business offers the opposite: reliance on the outgoing owner, opaque operations, unclear customer relationships, and unresolved legal or financial loose ends. Every one of those factors is a price reduction waiting to happen.

And that’s assuming the business sells at all. Many don’t. Businesses that cannot find a buyer (and without preparation, good businesses often can’t) simply close. Staff lose jobs. Customers lose services. The local economy loses productivity it can’t easily replace.

What good succession looks like

There is no single template for a successful business transition, but there are well-worn paths. Some owners pass the business to family, a route that requires frank conversations about capability, interest, and fair treatment of other family members. Others sell to a key employee or management team (a management buyout), which preserves institutional knowledge and staff continuity but requires careful financing arrangements. Others find external buyers, either trade competitors or investors, and exit cleanly.

All of these work. What doesn’t work is leaving the decision until circumstances force it: an unexpected health event, a lease not renewed, a key staff member departing. Forced exits almost always result in worse outcomes for everyone involved.

The fundamentals of preparation are consistent regardless of the exit route. First, get your financials in order and ensure they tell a clear, credible story. A buyer (whether family, employee, or stranger) is buying future earnings, and they need confidence those earnings are real and sustainable. Second, document your operations.

If the business exists primarily in your head, it is not really a business from a buyer’s perspective. It is a job that happens to have customers. Third, reduce key-person dependency. If significant customer or supplier relationships exist only because of you personally, that is a risk buyers will price aggressively. Start transferring those relationships now.

The opportunity in the crisis

Here is the part of this story that rarely gets told: for younger entrepreneurs and aspiring business owners in the eastern Bay, the coming wave of business transitions is an extraordinary opportunity.

Buying an established local business, with existing customers, supplier relationships, brand recognition, and cash flow, is often a more reliable path to business ownership than starting from scratch. And with many owners motivated to sell to people who will treat their staff and customers well, not just to the highest bidder, there is room for creative deal structures: seller financing, earn-outs, mentorship arrangements, and gradual handovers that reduce risk for both parties.

National data shows that business owners under 40 reported growth rates of 71 percent in 2025, compared to just 25 percent for those over 60. Some of that gap is energy and technology comfort. But much of it is simply that younger owners are in the building phase of their business lives, and that hunger matters enormously. Local businesses with the right fundamentals, in the hands of the right next generation of owners, have every reason to thrive.

Start the conversation

If you own a business and you are over 50, succession planning is not a morbid subject. It is one of the most financially important decisions of your professional life. The time to start is not when you’re ready to leave; it’s three to five years before that. Talk to your accountant, your lawyer, and a business advisor who understands the local market. Put a rough timeline on paper. Have the honest conversations with family or key staff members you might have been putting off.

And if you’re on the other side, a younger person with ambition and some capital, or a key employee who has wondered about buying the business you’ve been running for years, start those conversations too. You might find the owner across the desk has been waiting for someone to ask.

Whakatāne’s commercial future depends on this transition going well. It won’t happen by itself.

• Jason Lougher is the owner of Calc Business Advisors & Chartered Accountants. Our team advise businesses throughout the Eastern Bay of Plenty — and across New Zealand. Like this article or want to chat? Feel free to send me an email: [email protected]