“The demographic reality of Canada suggests that succession planning is no longer just a micro issue that impacts the businesses involved, but also, increasingly, a macroeconomic issue, capable of affecting the growth potential of the economy as a whole. And in survey after survey, business owners reveal that they are ill-prepared for the inevitable ownership transition that is quickly approaching. Admittedly, there is nothing new in this lack of foresight as this has been the case for many years. But this time around, the consequence of inaction will be more costly.
No less than 250,000 business owners1, or one-fifth of all businesses with employees, are now aged 55 and over. And their number has risen by 4% a year over the past decade. That’s more than double the rate seen in the 1990s. By the end of the decade, close to 350,000 business owners will be over the age of 55.
The practical implication of this reality is that close to 30%, or 310,000, of business owners will exit ownership or transfer control of their businesses within five years. Within the next ten years, one-half (or 550,000) of owners will exit their business.”