South Australia’s wine industry is not only a major economic driver for our state it’s a way of life and a source of immense pride for many local families.
For many winemakers the passion for their craft runs through their blood and has done for generations. Since the first vineyards were planted in South Australia in 1800s, numerous wineries have been built up by hardworking families who have left an indelible legacy for both their descendants and our state.
Australia’s ongoing economic prosperity is, and always has been, intrinsically tied to the success of private and family businesses. These businesses currently contribute more than $600 billion to Australia’s GDP – that’s more than a third of our entire GDP – so ensuring the successful transfer of family and private businesses has never been more important.
With two-thirds of Australian family businesses planning to either sell their business or pass it on to the next generation, succession planning is essential for a smooth transition and business longevity.
However of the 38 per cent who want to pass the baton to the next generation, more than 80 per cent still don’t have a succession plan and this can pose significant challenges when it comes time to transitioning ownership.
Results also show 70 per cent of business transfers are failing between generations and only five per cent are surviving to a fourth generation, so it can seem like the odds aren’t in your favour. But the good news is that with strategic planning and expert advice, business owners can avoid the common pitfalls experienced by others.
Succession planning is more than just signing a document or handing over the keys to the winery. There are numerous aspects at play such as creating enduring business structures, and training and development of the next generation.
While transferring business ownership can often be daunting, families need to start planning early and be deliberate about the transition process in the same way they are about building the business.
Just as you carefully tend vines in order to produce the best wine, you need to nurture your business through every stage of its growth to reap the best results.
Throughout the past six years, PwC has supported the Hot 100 as they shine the spotlight on emerging and established wineries, which we hope to see flourish for generations to come. As our iconic wine industry goes from strength to strength, it’s vitally important to ensure local businesses are well equipped to navigate the complexities of succession planning, so our state can continue to create history.
Running your own business takes blood, sweat and tears and it’s only natural that you want a successful legacy that reflects the hard work and sacrifices you’ve made to build it up.
James Blackburn, Partner PwC