GETTING STARTED WITH SUCCESSION PLANNING: PART I

A survey of 4,300 small business owners by the Canadian Federation of Independent Business (CFIB) revealed about 37% said they plan to sell their businesses upon retirement to non-family members. Twenty-six per cent said they planned to transfer or sell their business to family members, and an equal percentage had no business transfer plans yet.

These numbers are significant, because in both the USA and Canada, approximately half of all workers are employed in small and medium businesses. Inadequate succession planning and business failure could jeopardize millions of jobs in both countries.

The first births of the baby boom generation will be turning 60 in 2006. This fact means more and more small and medium business owners will be retiring in the next ten years than in any prior period in American and Canadian history. All of these business owner retirements exacerbate the problems of lack of succession planning, which including keeping the business viable post-retirement of the founder(s).

When business owners do not have children who will take over the business upon their parents