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Nearly one in three Australian small business owners plan to retire within five years, but only 16 per cent have a documented succession plan, according to new research that warns tens of thousands of viable businesses could shut their doors permanently.
The research, commissioned by online design and marketing platform VistaPrint which surveyed 510 Australian small and medium business owners in early 2026, found 45 per cent of them considering an exit have no succession or sale plan at all.
A further 25 per cent say they have never even considered what happens to their business when they leave.
Applied to the Australian Small Business and Family Enterprise Ombudsman's figure of 2,724,326 small to medium businesses nationally, the data suggests tens of thousands of businesses could close not because they are failing, but because their owners have no plan to hand them on.
VistaPrint has labelled the trend a "succession cliff" at at a time when small business insolvencies are at near-record highs since mid-2025.
"With one in three small businesses getting close to retirement without a clear plan for what happens next, we are heading towards a succession cliff," says Marcus Marchant, CEO of VistaPrint ANZS.
"In many cases, the business is still heavily tied to the owner, through their relationships, reputation and day-to-day involvement, which can make it much harder to sell, hand over or keep the business going when they step away.”
The research found 71 per cent of all small business owners rely more on personal reputation and word-of-mouth than formal branding, a figure that rises to 78 per cent among owners aged 50 and over.
The findings have been released at a time of rising insolvency figures, with ASIC data showing increasing numbers of businesses entering external administration in recent years.
The research suggests a parallel and less visible threat to the sector involving solvent, profitable businesses closing simply because no transition pathway exists.
Forty per cent of respondents say they have already experienced a sudden or unplanned departure from a previous business due to health crises, financial pressure, burnout or market shifts.
However, one in five of those planning to retire have not discussed their exit with anyone - neither family, staff nor an adviser.
Despite the succession gap, 63 per cent of owners surveyed say they want their business to continue beyond them, suggesting the desire to transition exists even where the planning does not.
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