Succession Can Breed Success
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Succession Can Breed Success
Full Report
June 2005
Doug Bruce, Director of Research
Derek Picard, Associate Researcher
Summary
In recent years public policy has focused primarily on two key platforms: health care and economic growth. A key driving force behind these issues is Canada’s aging population, as it creates shortages of qualified labour and exerts significant pressure on those institutions that deliver essential social services such as health care. Many have highlighted the emergence of an aging population and its impact on public policy. However, one key aspect has been overlooked—the effects of an aging small and medium-sized enterprise (SME) sector.
Generally, only one third (35 per cent) of SME owners are planning for their future succession. However, among those who have a succession plan, the majority are informal, unwritten plans, which have not been shared with the intended successor. Unlike many planning exercises undertaken by small business, experts press the need for a formal succession plan. Heightening the alarm on the issue is that 41 per cent of SMEs indicate their intentions to exit their businesses within 5 years.
To obtain insight into the issue of SME succession, CFIB conducted a formal survey of business owners. The survey is unique in several aspects: it focuses on both family-owned and non-family businesses; it covers all major industry sectors; and provides insight into those who recently acquired their business through succession.
