A Perfect Storm

Recent demographic data reveals a startling reality: the average Canadian business owner is aging - and fast. According to Statistics Canada’s Survey on Financing and Growth of Small and Medium Enterprises (2020), over 60% of SME owners in Canada are over the age of 50, and nearly 20% are already over 65. With more than 700,000 businesses expected to transition ownership over the next 5 to 8 years, the country is facing a mass exodus of business leadership, much of it unplanned.

This unprecedented wave of retirements represents more than a generational handoff. It is an economic inflection point with over $1 trillion in private business value at stake. Yet, despite this looming shift, the majority of owners remain unprepared to exit successfully. Many believe they still have time. Others assume a buyer will appear when they’re ready. Most are unaware that by the time they want to leave, their business may no longer be attractive, or even viable.

*Statistics Canada 2020 Survey of Canadian Small Business Owners (adjusted to 2025)

While the desire to “wait and see” may feel safe, the risks of failing to prepare for a business exit are significant, and often irreversible.

1. Erosion of Business Value: Time is not always a business owner’s friend. Without proactive preparation, businesses often become stagnant. Processes remain undocumented. Key customer relationships are tied to the owner. The team defers decisions upward. Buyers see these as risks, signs that the company isn’t transferable or sustainable without the owner’s daily involvement.

As a result, these businesses command lower offers or fail to attract any qualified buyers at all. Worse still, many owners don’t realize the extent of the issue until they're already burned out or forced to sell.

Takeaway: The value of a business is not just based on revenue - it’s based on how easily the business can survive and thrive without the owner.

2. A Crowded, Buyer-Dominated Market: With over half of privately held Canadian businesses expected to go up for sale in the next decade, the market is rapidly shifting toward buyers. This emerging "buyer’s market" favors companies that stand out: those with strong teams, clear systems, healthy cash flows, and a proven ability to operate independently of the founder.

Mediocre or “middle-of-the-road” companies will be passed over or forced to accept steep discounts. Owners banking on average performance and loyal customers to carry them through a sale will likely be disappointed.

Takeaway: In a market flooded with sellers, only Best-In-Class businesses will capture the attention—and capital—of buyers.

3. Owner Burnout and Forced Exits: Exit planning isn't just about the numbers, it’s about timing. Many owners wait until they feel “ready,” but burnout, illness, or unforeseen life events often arrive before the business is sale-ready. In these situations, the owner may be forced into a rushed or distressed sale, often at a fraction of the business’s potential value.

Additionally, selling under pressure rarely results in favorable deal terms. Earn-outs become contentious. Transition timelines get shortened. And the ability to negotiate is lost.

Takeaway: You don’t wait for a storm to prepare the roof. The best time to start exit planning is before you need to.

4. Unrealized Legacy and Family Risk: For many business owners, their company is more than a financial asset, it’s a legacy. But without a structured transition plan, legacy can quickly become liability. Whether the goal is to pass the business to children, sell to employees, or gift ownership over time, failure to plan can create confusion, resentment, and failed transitions.

These situations can fracture families, destroy value, and damage reputations built over decades. Even where family succession is the goal, it requires years of grooming, governance planning, and leadership development to succeed.

Takeaway: Legacy doesn’t just happen—it’s intentionally designed through clear succession strategies and professional guidance.

Owners who achieve successful, profitable exits don’t just think about leaving, they plan for it as a strategic transformation. The most successful transitions come from owners who treat their business as an investment that must be de-risked and made scalable, regardless of who the next owner will be. Best-In-Class is a term used to describe a company or product that stands out as the best among its peers within a specific industry or market. This designation is highly sought after, as it confers numerous advantages, including increased market share, stronger customer loyalty, and enhanced profitability. Achieving Best-In-Class status requires more than operational excellence: it demands an unwavering commitment to continuous improvement, innovation, and leadership.

These owners typically:

• Develop a strong, empowered leadership team that can operate independently,

• Systematize and document key processes, making operations repeatable and transferrable,

• Professionalize financial reporting, ensuring clean, credible data for buyers,

• Diversify customer and revenue streams, reducing key account dependencies, and

• Engage external advisors, exit planners, accountants, legal counsel, and estate professionals to align business readiness with personal financial goals.

By doing this work well in advance, owners create a business that is not only sellable, but highly desirable.

Takeaway: Exit planning is not a one-time event, it’s a multi-year transformation.

In today’s environment, Best-In-Class businesses command the highest attention, the most aggressive bids, and the best terms.

These companies exhibit:

• Strong systems and replicable processes,

• A culture of performance and accountability,

• Solid financial performance and growth,

• A team that can lead without the owner,

• A forward-facing brand with loyal customers, and

• Strategic focus, innovation, and sustainability.

Buyers are not just purchasing revenue, they’re acquiring reliability, scalability, and future potential. The greater the confidence a buyer has in the ongoing success of the business post-sale, the higher the valuation they are willing to assign.

Takeaway: Best-In-Class isn’t a tagline, it’s a market signal that the business is valuable, resilient, and investment-worthy.

Canada’s private business sector is on the edge of a historic transition. Tens of thousands of businesses will change hands, or cease to exist, within the next decade. The difference between those that succeed and those that struggle will be preparation.

Every owner will exit their business eventually. The only questions are:

• When will you leave?

• Will it be on your terms?

• And will your business be ready to succeed without you?

For those who prepare early, the opportunity is enormous. For those who delay, the consequences may be irreversible.

Is your business ready for the next chapter?

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