Succession planning is emerging as one of the biggest challenges facing privately owned businesses. Westpac’s Warrick Gibbs shares why starting early can help business owners protect value, create options and secure the future of their business.

Every business owner has an exit plan. The question is whether it is deliberate or accidental.

Across the Bay of Plenty, hundreds of successful businesses have been built through grit, entrepreneurship and years of hard work. Many have grown from family operations into significant employers, supporting local communities and contributing to one of New Zealand’s fastest-growing regional economies. Yet for all the attention given to growth, profitability and customer acquisition, one critical business issue is often overlooked: who takes over when the owner is ready to step away?

Succession planning is no longer simply a retirement conversation. It’s a business strategy, a value creation exercise and increasingly one of the most important challenges facing privately owned businesses throughout New Zealand. “I’ve met many business owners who can tell me exactly where they want their business to be in five years’ time, but far fewer who can tell me who will own it in 10,” says Warrick Gibbs, Corporate Area Manager for Westpac NZ.

Research suggests the issue is becoming more urgent. A national succession planning study found that more than 90,000 New Zealand businesses were owned by people aged 55 and over, with many likely to exit their businesses over the following decade. Despite this looming transition, relatively few owners have a formal succession plan in place.

While precise Bay of Plenty figures are difficult to isolate, national business ownership demographics and the region’s ageing population suggest a significant proportion of local businesses are owned by people approaching or already beyond traditional retirement age. The Bay of Plenty’s population continues to age, with almost one in five residents aged 65 years or older, and the over-65 age group projected to remain one of the fastest-growing segments of the regional population.

KPMG’s 2026 New Zealand Family Business Report found only 3% of owners reported being highly confident that the next generation was ready to lead. The challenge is clear. Many owners have created valuable businesses, but fewer have invested the same effort in preparing the next generation of leadership and ownership. “One thing I’ve consistently observed is that the most effective succession plans don’t start when an owner is ready to leave. They start when the business is performing well and everyone still has options,” says Warrick.

For most businesses, succession will fall into one of three broad pathways: transferring ownership to family, transitioning ownership to management, or selling the business to the market.

1. Family succession: Preserving legacy while creating opportunity

For many business owners, passing the business to the next generation remains the preferred succession pathway.

There is a natural attraction in seeing family members continue a business that may have taken decades to build. Family succession can preserve the values, culture, customer relationships and community connections that have helped make the business successful.

However, successful family succession is rarely as simple as handing over the keys. The next generation must have both the desire and capability to lead. Leadership skills, financial literacy, governance experience and industry knowledge all need to be developed well before ownership changes hands.

The financial challenge can be equally significant. Many second-generation successors have the capability and commitment to take over the business but lack the capital required to acquire ownership at market value. Questions around valuation, fairness between siblings, debt capacity and long-term ownership structures often become major considerations.

This is where banks can play an important role. Working alongside accountants, lawyers and business advisers, banks can support intergenerational ownership transfers through tailored funding solutions, including share purchase finance, business lending, debt restructuring and staged buy-in arrangements. These structures can enable family members to progressively build ownership while allowing retiring owners to realise value from what is often their largest asset.

The earlier these conversations begin, the greater the range of options available. A well-planned transition can provide certainty for both generations while protecting the long-term sustainability of the business.

2. Management buyouts: An often overlooked opportunity

For many business owners, the ideal successor may already be working within the business.

Long-serving managers often possess deep customer relationships, operational knowledge and leadership skills. They understand the culture, know the staff and have often helped drive the success of the business for many years. “One of the opportunities I see most often is that the future owner is already working in the business today. The challenge is often less about capability and more about creating a pathway to ownership,” says Warrick.

Few managers have the necessary financial resources to acquire a successful business outright. This is where banks can play an important role in supporting business succession.

Through carefully structured management buyouts, banks can help facilitate ownership transitions by providing acquisition funding, business lending facilities and tailored shareholder structures. Depending on the circumstances, solutions may include staged ownership transfers, progressive share purchases, vendor finance arrangements, acquisition lending or a combination of debt and equity funding.

For retiring owners, this creates confidence that the business remains in capable hands. For emerging leaders, it provides a realistic pathway into ownership that may otherwise have been out of reach.

Importantly, management buyouts often deliver strong outcomes because they maintain continuity. Staff, customers and suppliers experience minimal disruption while the business retains much of its institutional knowledge and leadership capability.

3. Selling to the market

Where no suitable family or management successor exists, a sale to an external buyer may provide the strongest outcome.

The most attractive businesses are those that can operate successfully without the owner. Buyers place a premium on strong management teams, reliable earnings, diversified customer bases and robust governance structures.

Businesses that are heavily dependent on their founder often achieve lower valuations because the perceived risk is higher. “Perhaps the biggest misconception I encounter is how long it takes to prepare a business for sale. The best time to prepare is often five years before you intend to sell,” says Warrick. “It takes time to strengthen management, improve systems, diversify customers and reduce reliance on the owner. Value isn’t created at the point of sale; it’s created in the years leading up to it.”

Banks can also support external transactions by providing acquisition finance to incoming buyers. This broadens the pool of potential purchasers and can enhance the attractiveness and saleability of the business.

Warrick Gibbs, Westpac Corporate Area Manager

Creating Choices

Ultimately, succession planning is not about retirement – it’s about creating choices. Whether the future involves passing the business to family, empowering management to become owners or selling to the market, the most successful transitions begin years before the owner intends to leave.

The Bay of Plenty has been built on entrepreneurship, family enterprise and long-term relationships. Ensuring those businesses continue to prosper through the next generation of ownership may be one of the most important economic challenges, and opportunities, the region faces over the coming decade.

“If I’ve learned one thing from working alongside Bay of Plenty business owners, it’s that a successful business is not judged solely by what an owner builds. It is also judged by what remains strong after they leave.”

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Investment provides the foundation for a growing, prosperous region. Priority One helps attract and enable the capital, businesses and infrastructure investment needed to unlock opportunity and support sustainable long-term growth. Learn more about our investment work and read other recent opinion pieces here.

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