Many Small Businesses Will Be Handed Over to Successors In Near Future
How does the aging population of Canada come into play with small businesses? Over the course of the next five years, it's estimated that almost $2 trillion in business assets are expected to change hands. According to a CIBC World Markets analysis, this will mark the largest turnover of economic control on record. It's also estimated that by 2022, that number will be at least $3.7 trillion.
As it stands right now, at least a fifth of business owners with employees are at least 55-years-old. As these business owners begin planning their retirements, they also must decide whom they want to hand their business over to if they wish to keep the business running.
This may seem like an issue that only affects businesses internally, but poor succession planning can have a critical effect on the Canadian economy. If businesses are not managed properly, their combined job losses, premature sales, bankruptcy and reduced productivity will become a national concern. Nearly one third of Canadian businesses are set to have new ownership within the next five years. To put the numbers into perspective, the number of companies that are estimated to change ownership by 2017 account for about 15 percent of Canada's GDP and employ nearly two million people. Another startling statistic is that almost six out of ten of these business owners currently do not have an exit strategy in place. To learn more, continue reading the article here.
If you are a small business owner planning your upcoming retirement, how can you ensure your business remains in good hands? If you are planning on handing your business over to a successor, you might consider outsourcing your record keeping and bookkeeping services if you are not already doing so. Having a reputable accounting firm handle your year ends, bookkeeping, record keeping and annual returns can give you confidence that a third party is helping your business stay on track and giving you honest reports. KD also provides filing services for changes in directors, dissolutions and amendments. We can also assist business owners with strategies to successfully exit, sell or pass on their businesses. Start making a plan now to protect the legacy of your business forever.