Succession Planning Trends: What the Latest Strata Benchmarking Report Reveals

The latest Macquarie Strata Benchmarking Report highlights a critical focus area for strata business owners: succession planning.  

According to the report, 40% of business owners intend to retain ownership. However, within the next two to five years of the report’s publication, many plan to implement succession strategies to evolve their management structure and transition leadership. 

Interestingly, businesses managing both less than 1,000 lots and more than 1,000 lots show a preference for maintaining operations through their staff. Some opt to sell equity stakes to key employees or sell the business to external parties as part of their succession plans. 

Take a look at the breakdown below:

As outlined in the report, succession planning is becoming increasingly crucial for strata business owners. It is often driven by a range of personal or professional considerations, such as:

• fractured relationships between business partners

• leadership fatigue or long-term burnout

• a planned retirement timeframe

• health considerations impacting ongoing involvement

• a desire for a lifestyle switch—such as a tree change or sea change

• wanting more time to focus on family or other personal goals

Regardless of the reason, having a clear and well-structured strategy is essential to support long-term business continuity and success.

The Challenge of Owner-Dependency 

The strata sector’s resilience and consistent revenue growth year by year offer owners a unique opportunity to reap the rewards of their hard work by stepping back from daily operations.  

However, owner-operated businesses can face more challenges in succession planning, as heavy reliance on the owner’s personal involvement can diminish the business’s value and its ability to thrive independently. 

But that doesn’t mean it’s impossible. 

As John Warrillow, author of Built to Sell, explains, reducing owner-dependence is key to creating a valuable and sellable enterprise that can continue to flourish long after the owner steps away. 

Strategies for Building an Owner-Independent Business 

According to Warrillow, here are important ways to create a business that can run without the owner at its centre: 

• design for independence: structure your business to run without you to boost its flexibility

• focus on scalability: create systems that facilitate growth without constant owner involvement

• productise your services: standardise services for easier replication and scaling

• build a strong leadership team: develop a competent team to reduce owner dependence and strengthen resilience

• create recurring revenue streams: establish recurring revenue models for stability and sustainability

These measures help business owners create a more independent, scalable, and valuable company, supporting future growth and smoother transitions.

Looking Ahead: The Future of Succession in Strata Businesses 

Strata business owners are expected to increasingly focus on succession planning, maximising profitability, and reducing reliance on key individuals through technology integration. By starting succession planning early, owners can guarantee higher business value and groom capable leaders from within. Proactive planning makes sure of smoother transitions and lays the foundation for long-term success. 

If you’re thinking about selling your strata business as part of your succession plan and would like some guidance, feel free to reach out. Our team of experts at Strata Business Brokers is here to help.