Tag: SuccessionPlanning

A recent survey, The Great Retirement, found that 51% of the global workforce is expected to retire or leave within five years. For South African Small and Medium-sized Enterprises (SMEs) already struggling with skills shortages, this could place additional pressure on business continuity, productivity and growth. Moreover, more than 60% of South African businesses already cite skills gaps as a barrier to progress.

There is something wonderfully optimistic about the word inheritance. It carries a sense of something gained without effort, simply handed down. A holiday home by the sea. A share in a property. Perhaps an investment that has been in the family for years. Then comes the small print. The holiday house is shared with your siblings.

Safeguarding your family business for the next generation goes beyond just having a will - particularly when the family is dependent on income from the business. While the United Nations estimates that family-owned or managed businesses generate about two-thirds of global GDP and 60% of jobs, a successful business means far more than an income-producing asset for many South African families.

For boards of listed companies, Chief Executive Officer (CEO) succession is often framed as a debate about background. Finance or operations, commercial flair or financial discipline? The tendency is to treat the top job as the natural culmination of a particular functional path. The evidence suggests that this thinking is increasingly outdated.

The 2026 national budget did not introduce significant headline tax increases. However, the 2026 national budget implemented structural threshold adjustments that materially affect succession planning. These adjustments also affect retirement modelling, estate liquidity analysis and business exit calculations for Small and Medium Enterprise (SME) owners.

Tomorrow’s leaders will still need wisdom. Wisdom still needs experience. And experience still needs time.

Consider this scenario. You have invested ten years into building your business. It has supported your lifestyle, paid salaries, funded personal expenses and allowed you to draw dividends. Your accountant has helped you minimise tax by reducing reported profit and keeping the balance sheet light. At the time, it felt efficient and responsible. Then you decide it is time to sell, and suddenly the numbers that helped you save money now work against you.

Succession planning and integrating the next generation remain critical and challenging issues for many family businesses. Without a thoughtful and structured approach, business owners risk undermining their legacy. They also risk weakening the long-term sustainability of the enterprise. This happens when family, ownership, and business systems are not prepared for the transition.

In the evolving landscape of South African business families, the concept of wealth has expanded beyond mere financial accumulation. This aligns with the global shift from traditional wealth creation focused solely on financial assets to a broader definition that includes human and social capital.