Jan 11, 2023
Small Business Owners Ready To Exit
Over $2 trillion in business assets could change hands within the next decade as over three-quarters (76 per cent) of small business owners plan to exit their business, says a report by the Canadian Federation of Independent Business (CFIB). Retirement is the top reason business owners cite for leaving their business (75 per cent), while 22 per cent are burned out and 21 per cent want to step back from their responsibilities as owners. However, only one in 10 business owners (nine per cent) have a formal business succession plan in place. The most common obstacle to succession planning for half (54 per cent) of small business owners is finding a suitable buyer or a successor. Nearly half (43 per cent) are struggling to measure the value of their business, while 39 per cent say the business is too reliant on them for day-to-day operations. The pandemic and related challenges have also affected owners and their exit timelines. Nearly four in 10 owners have changed their business exit dates with 17 per cent accelerating their timeline, often as a result of the stress they were under, while 22 per cent are delaying it by at least one year because they have incurred too much debt or the value of their business had gone down too much. To develop a succession plan, 43 per cent of business owners reach out to accountants for their services. Almost a quarter (24 per cent) work with lawyers, while 39 per cent rely solely on themselves to develop succession plans.