You've spent years creating and building your business empire. How do you ensure it will survive to the next generation?
According to a 2006 Canadian Federation of Independent Business survey , slightly more than one third of independent business owners plan to exit their business within the next 5 years and within the next 10 years two-thirds of owners plan to exit their business. The survey also found that small and medium sized enterprises are not adequately prepared for their business succession: only 10% of owners have a formal, written succession plan; 38% have an informal, unwritten plan; and the remaining 52% do not have any succession plan at all. The results are backed by a 2004 CIBC survey which suggests that succession planning is increasingly becoming a critical issue. By 2010, CIBC estimates that $1.2 trillion in business assets are poised to change hands.
It is important that the succession planning process is started early because it takes time. Some business owners delay the process because they think they are too busy or feel that it is too costly. Other business owners are unaware that there is even a problem. Succession planning may also be avoided or delayed because of the potential for emotional issues, such as facing retirement/mortality, dealing with family conflict and the feeling of losing control.
Article of Interest: