Seven out of 10 business owners are going to retire within the next eight years.
However, only one in 14 has a written succession plan, says Phil Symchych, president of Symchych Consulting in Regina.
“That’s scary.”
As business owners exit, their companies will be competing with others for new owners and money.
Symchych said small and medium sized businesses in Canada contribute 45 percent of the country’s gross domestic product and employ 60 percent of all workers.
“This is a trillion-dollar business issue,” he said, referring to succession within these companies.
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Studies show that 30 percent of businesses survive a second generation of ownership. That number drops to 15 percent for the third generation.
Recently, Symchych helped Saltcoats, Sask., EMW Industrial develop a management buy-in approach to succession.
He said the approach can work for businesses with as few as five to 10 employees.
Business owners need plans to deal with their business, their families and the ownership group. Friction can result when additional shareholders or family members are brought in or left out.
Succession planning can be an emotional experience but Symchych said it has to be done.
“Get started and put it in writing,” he said.
