Findings from a new Succession Readiness Report from MNP reveal that many retiring business owners, including dealers, are delaying or underestimating the importance of succession planning.
In a news release about the report, MNP said these owners are leaving important decisions about selling, closing, or transitioning their businesses unanswered. The study found that 64.1 per cent have considered their exit goals, though they have not yet formalized a plan for succession. And 20.7 per cent have yet to start even thinking about one.
“We are witnessing one of the most significant wealth transitions in history as Canada’s workforce ages and more small business owners approach retirement,” said Kerry Smith, National Leader of Family Office Services at MNP. “At the same time, economic uncertainty continues to rise for businesses across the country.”
Smith added that many owners view their businesses as the cornerstone of their financial futures and an important source of jobs and stability for their employees. “The future of our communities and local economies hinges on these owners making strategic decisions and preparing for effective succession and exit planning.”
In its update, MNP said a notable amount of Canada’s private sector workforce, 63.8 per cent, depends on these business owners to prepare their succession plans properly, as the outcome will “ripple through employees, communities, and local economies.” However, only 8.5 per cent of business owners have established clear, actionable goals for a changeover.
“For owners, it secures their financial future,” said Smith. “For employees, it provides stability and confidence in their jobs. Without a written plan, transitions become far more uncertain, putting the survival of the business and the livelihoods of its workforce at risk.”
