The $80 Billion Question: Why Every Owner Needs a Small Business Exit Strategy
- glenn13205
- Sep 17, 2025
- 2 min read
Why a Small Business Exit Strategy Matters for GDP
Australia’s small business sector is the backbone of our economy. Yet as thousands of owners approach retirement, the need for a small business exit strategy has never been greater. Without preparation, an estimated 350,000 businesses may fail to sell in the next decade — putting up to $80 billion of GDP and nearly one million jobs at risk.
But there’s a challenge looming that few are talking about loudly enough.
Over the next decade, as baby boomer owners move into retirement, an estimated 350,000 small businesses will be looking to transition. What happens if they don’t sell or hand over successfully?
The Cost to GDP
On average, a small business contributes about:
$149k of value-added per year for non-employing or micro firms (0–4 staff), and
$1.03m of value-added per year for employing small firms (5–19 staff).
If we apply those benchmarks across 350,000 businesses, the numbers are sobering:
$80 billion of GDP at risk annually if these businesses disappear without succession.
If the mix skews toward larger employing businesses, the figure could push closer to $110 billion.
That’s not a one-off loss — it’s a permanent hole in annual economic activity.
The Human Capital at Stake
Behind every business is people. Using ABS averages:
Micro firms support ~1.3 jobs each.
Small employing firms support ~10 jobs each.
If 350,000 businesses vanish rather than transition, up to 725,000–1,000,000 jobs could be lost. These aren’t just numbers — they’re families, communities, and decades of built-up expertise. When an owner simply closes the doors, tacit knowledge, customer relationships, and industry skills evaporate overnight.
Why Every Business Needs a Small Business Exit Strategy
Not every business will fail to transition. Some will pass to family, merge with competitors, or quietly wind down. But the risk is real: many owners are under-prepared for sale, with businesses that are heavily reliant on them personally, lacking the systems or independence buyers look for.
The result? Owners get little or nothing for years of work, staff lose stability, and communities lose vital services.
The Opportunity in Preparation
The good news is this scenario is avoidable. With the right preparation — building independence, strengthening cashflow, documenting processes, and planning the exit early — businesses become attractive, valuable, and transferable.
Preparing your business for sale isn’t just about maximising a payday. It’s about protecting jobs, preserving value for the next generation, and ensuring Australia’s economic backbone remains strong.
Final Thought
The question isn’t whether owners will exit — every business changes hands eventually, whether planned or forced. The real question is whether the exit creates value or destroys it.
If even a fraction of those 350,000 businesses fail to transition, the cost to Australia could be tens of billions in GDP and up to a million jobs lost. The cost of preparation, by comparison, is a rounding error.
Now is the time for business owners to act.
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