The majority of Canada’s small businesses—58%—still do not have a succession plan in place, according to a new survey.
The survey, released by BMO Financial Group, was conducted in March and April by Leger Marketing and asked asked 500 Canadian business owners about their succession plans.
The top reason preventing Canadian small business owners from establishing a succession plan was the view that it’s too early to begin thinking about it (36%).
“Just like creating a business plan or buying insurance, implementing a succession plan well in advance of your projected retirement can guarantee a smooth transition process once it’s time to execute it,” said James Wong, vice-president of succession planning, BMO Financial Group, and co-author of The Transition Experience: What Every Canadian Family Business Owner Should Know Beyond Succession Planning.
“Creating a succession plan can also help realize the maximum potential value of a business while mitigating risks associated with economic uncertainty or a sudden shift in management,” he says.
BMO’s study also revealed that:
- Of those business with 10 employees or more, half had a succession plan in place; two-thirds of business with fewer than 10 employees reported they did not have a plan
- One-third (36%) of Canadian small business owners want to keep their businesses in the family
- More than one-quarter (26%) would select an outside source to buy out their business
Originally published on Smallbizadvisor.ca