For Immediate Release
March 8, 2018
Ringing the Alarm Bells on Succession Planning
According to a report released by BDC, The Coming Wave of Business Tranitions in Canada:
- Nearly 40% of business owners who expect to sell to outside buyers within the next five years appear to have done little or nothing to spruce up their financial reporting. Most have also not taken action to maximize cash flow in anticipation of a sale. These omissions do not augur well for the future value of their enterprises.
- Close to 60% of Canada’s small and mid-sized business owners are aged 50 or older, nearly double the proportion of the overall workforce.
- Four out of ten entrepreneurs in Canada are likely to leave their businesses within the next five years, up from one in three in the mid-2000s. The main reason they give for moving on is retirement.
- Over half of these entrepreneurs intend to sell or transfer their business to someone outside their family. A quarter of them see a family succession in the cards, while just over one in five expects to wind down the business and sell its assets.
- As with a homeowner putting a house up for sale, any entrepreneur planning to sell a business, typically his or her biggest asset, wants to realize the highest possible return. However, this study shows that many business owners are not making the best moves to ensure that outcome.
We want to change these statistics and provide solutions to our members.
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