A new report, released Tuesday, says 37 per cent of business owners surveyed in Canada wish they could retire, transition or sell their business but are not prepared.
The poll was released by KPMG in Canada.
“With the COVID-19 pandemic, many business owners have been forced to make tough decisions around investments needed to manage through the crisis and beyond,” said Yannick Archambault, national family office leader for KPMG in Canada, in a news release. “Given the ongoing challenges, more than a third wish they could sell or transition their business to the next generation today.
“But these kinds of decisions require serious planning and the persistent economic uncertainty posed by the pandemic has accelerated the normal planning timeframe for these decisions. As a result, there is a greater urgency today to have robust, forward-looking plans in place and solidify leadership and governance structures to protect the business and facilitate a transition.”
Key poll findings include:
- 24 per cent of respondents who don’t have an exit plan but want to leave within one to two years, regret not selling or transitioning their business before the pandemic;
- 64 per cent are adopting digital and emerging technologies as a result of COVID-19;
- 60 per cent do not have audited financial statements;
- 76 per cent do not have a governance framework or structure in place; and
- 70 per cent believe a more tech savvy generation of leaders is needed to succeed in the new reality.
“For family business owners, the readiness of the next generation to assume control of the business is a key consideration when thinking of retirement,” said Archambault. “Most business owners need to feel confident their business is in safe hands with the next generation or a strategic third-party, before making the decision to sell or transition the business. Overall, our poll findings reveal that 28 per cent of respondents are ready to retire or sell the business but feel obliged to stay on because their successor is not prepared to take over the business. This may or may not be a family member who has been involved in the running of the business.
“We also heard from entrepreneurs about the growing importance of technology, a lesson driven home by the realities of working during a pandemic. Most entrepreneurs (78 per cent) said companies must go digital to compete, and 70 per cent believe a more tech savvy generation of leaders is needed to succeed in the new business reality.”