"you can't control the waves, but you can learn to surf"
EVERY BUSINESS OWNER NEEDS TO KNOW WHAT'S COMING - This Canadian Federation of Independent Business (CFIB) report explains what every business owner needs to understand to create a sense of urgency to get them to move ahead in planning and executing their business transformation to be exit-ready and exit-attractive. It is never too early to get ready as the biggest key is building a great business and team that is staying who can grow the company regardless of ownership.
If you are a business owner between the ages of 55 and 65, are the mayor of a municipality in Canada, or are a policy maker, then this CFIB report should frighten the heck out of you because this is much worse than we believed. 76% percent of small business owners in Canada are planning to transition out of their businesses in the next 10 years!
This is a significant number. Why?
Canada's economy is driven by small businesses, not by large ones. We have close to 1.2 million small privately owned businesses in this country that employ between 4 and 100 people. If your local economy is dependent on small businesses for employment, employed locals who own houses to support your tax base, or you are the federal government depending on T4 income tax remittances then the potential consequences will be catastrophic. If there is no employment, there will be no taxable income. There will be no income because there may well be no businesses to hire employees!
Most small business owners are expecting to sell and support their retirement lifestyle with proceeds of the sale of their business, but given the staggering number of exiting owners who are planning to transition out, this will be devastating, as only those companies who are attractive assets will be purchased.
Helping business owner set their business up for a successful transition should be the top priority of governments and business owners alike, yet we have not seen any significant movement toward preparation for this tectonic shift. Preparing a business for a successful sale takes years. The current statistic is that less than 10% of businesses sell successfully. This report points towards that number getting a whole lot worse.