New Zealand business owners expect to wait longer to sell their businesses due to the current economic climate and are increasingly saying now is not a good time to sell a business, ASB said in its latest Succession Planning Monitor.

The Monitor's index of whether now was a good time to sell or not got worse in the December quarter, falling 3.3% from the September quarter to a net negative 74.

"While over a quarter of businesses plan on selling within the next 5 years, an additional indicator shows a 6.6% increase in the 3-5 year selling horizon from quarter 3, 2008," ASB said. "This comes as business owners further extend their selling timeline expectations."

"The overall sentiment that we are seeing in the market place is reinforced in this report as one of caution but also that of taking the time to shore up and strengthen their business," ASB Head of Relationship Banking and Financial Services James Mitchell said.

"Succession planning readiness showed modest increases across a range of circumstances such as: expecting an unexpected buyer to make an offer; unexpected illness; a partner exiting and making key staff shareholders," ASB said.

"The results of this survey indicate that our businesses have started to think more about succession planning but there's still a long way to go. Many of these companies haven't put comprehensive contingency plans in place to ensure their short and long term survival. This type of planning should lead into a sound strategy for when the market improves. Survival is key in these times, however it is equally important to take stock and set realistic business goals giving direction for the future."

"Determining the market value of a business in quarter 3, 2008 showed an concerning 22.6% of owners who didn't know the market value of their business. This has now decreased to 13.5%..."