Executive Summary
Canada is approaching a significant business ownership transition. Nearly two-thirds (63%) of small business owners expect to exit their business within the next decade, representing more than $2 trillion in business assets that could change hands. At the same time, business exits continue to outpace new business creation. Ensuring successful ownership transitions will be critical to preserving jobs, maintaining local services, and supporting Canada's long-term economic resilience.
While many business owners recognize the importance of succession planning, preparedness remains low. Finding suitable successors remains the most significant barrier, formal succession planning remains uncommon, and many owners face challenges navigating complex financial, legal, tax, and valuation considerations. At the same time, acquisitions remain an underutilized pathway into entrepreneurship, suggesting significant opportunities to better connect retiring owners with those looking to run a business.
This report explores the intentions, challenges, and support needs of Canadian business owners as they prepare to transition their businesses. By identifying where succession plans break down and where support is most needed, it highlights opportunities to preserve viable businesses, support future entrepreneurs, and strengthen Canada's business succession ecosystem.
Key Findings
- Nearly two-thirds (63%) of Canadian small business owners plan to exit their business within the next decade, representing more than $2 trillion worth of business assets that could change hands.
- Retirement remains the primary driver of business exits (78%), but burnout or stress (21%) and high operating costs (20%) are also prompting many owners to leave.
- Most owners expect to transfer their business outside the family, with 54% planning to sell to an unrelated buyer and 28% to employees. Family succession remains common as well, with 21% of owners planning a family sale and 19% a family transfer. Meanwhile, 13% expect to close their business altogether, putting jobs, services, and economic activity at risk.
- Owners place a high value on non-financial outcomes when exiting, including protecting employees (86%), preserving how the business operates (83%), maintaining its legacy (80%), and keeping ownership in Canadian hands (72%).
- Succession planning remains limited. Only 6% of owners have a formal written succession plan, and those with a formal plan are far more confident in achieving a successful exit (86% versus 54% among those with no plan). Businesses acquired through a formal succession plan are also more likely to experience a smooth transition (81%).
- Finding a buyer or suitable successor is the most cited succession challenge (47%), followed by a lack of time to plan and difficulties determining the value of the business (37% each).