When Peter Cordwell left his shoemaking business, the exit was unusual for two reasons: it was well planned; and the new owner, Jess Cameron-Wootten, is not a family member.
For many family-owned businesses, good succession planning is rare. According to survey results from auditing advisory body BDO, too many parents assume their children will take over the family business, with only 39 per cent of them nominating a successor for chief executive. Cameron-Wootten bought the shoemaking business Custom Fit in Prahran, in inner Melbourne, because the former owner was unable to pass it on to the next generation.
''Peter had been working with his sons and hoping that they'd take it over, and it turned out that they weren't really that keen,'' Cameron-Wootten says.
''So he was looking for somebody to sell the business to. My father had been a shoemaker as well, so I decided it would be a very good fit, and there was an opportunity to learn from [Cordwell].''
Cameron-Wootten, who had been working as an interior designer, has seen his career take a satisfying detour. He's modernised Custom Fit by concentrating on its ''slow fashion'' appeal - and he's making a success of it.
Succession planning problems have been widely documented in recent years, with most reports saying the same thing: owners of small and medium businesses don't properly plan for their succession.
There's little discussion, however, about the enormous opportunity this represents, especially for Gen X and Gen Y.
''We really think there's a movement of businesses being passed over the intergenerational line,'' says Dr Richard Shrapnel, a partner of Pitcher Partners, which has been researching the topic with Swinburne University. ''I think there are major opportunities there for Gen X and Y,'' Shrapnel says. ''The opportunity is there to acquire them, and to acquire them earlier rather than later.''
Risks and rewards
With businesses to transfer management and ownership being valued about $3.5 trillion in the coming years, and the latest survey data showing about 75 per cent of businesses have no exit strategy, the risks and rewards are apparent.
Grant Thornton partner Robert Powell agrees, though his firm believes the problem to be much worse, with its research showing less than 2 per cent of businesses having created a proper succession plan.
''We've done a lot of work with businesses of bank customers in the past 12 months, with these businesses typically having a turnover of $5 million to $100 million, and I can almost count on one hand any of them that had done a succession plan,'' Thornton says.
''The big challenge for Gen X and Y is funding but, if you get the right people who understand what they are buying, and understand the potential of what they are buying, there are bargains out there, real bargains.''
According to the Exit Planning Institute - an organisation of succession planning professionals based in the US - 80 per cent of businesses are not ''saleable'' in their present state. The predominant reason is the owners have not properly planned for selling the business. On average, businesses sell for half their potential value, again the main reason being a lack of planning.
''If you're a Gen X or Y, there's a terrific opportunity because you can get in there and potentially buy a business for half its worth,'' Powell says. ''A lot of work needs to be done by baby boomers if you're selling but, if you're a Gen X or Y and you're prepared to put the effort in and have an understanding of what's needed to turn those businesses around, then there are great opportunities''.
The numbers reflect the opportunity, too, with private businesses for sale in Australia reaching a record level of 32,787 for the latest quarter, according to the BizExchange Index of Australian Private Business Values. Shrapnel says Generation X and Y should pick the eyes out of the market and acquire businesses that make good strategic sense, which will grow in capital value. ''Get your shopping baskets out, act early, not late, and think strategically,'' he says.
And although there are opportunities for younger generations, there are also opportunities for owners wishing to exit. ''We see the equation working both sides,'' Shrapnel says. ''You can see the number of businesses and that turnover value in the next few years. It screams opportunity for those who want to take the risk.''