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Succession planning pays off for small businesses

2019-01-23

Marlin Horst head shotSuccession planning can ease the transition when the time comes to transfer ownership of family-run businesses, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

A recent report commissioned by the Canadian Federation of Independent Businesses (CFIB) found that just eight per cent of small and medium enterprise (SME) owners had a formal succession plan in place.

Around 40 per cent of the 2,500 respondents to the CFIB survey had an informal plan in place but more than half of the business owners had no plan at all for the life of the company after their departure.  

That was despite evidence that 47 per cent of owners intended to leave their businesses within five years, and almost three-quarters wanted to be out within a decade. In addition, around 62 per cent intended to rely on the proceeds of an eventual sale to partially fund their retirement.

Horst, partner with Shibley Righton LLP, says it’s never too early to start planning a succession, but adds that he’s not surprised by the results of the survey. 

This is an excerpt from an article that appeared on AdvocateDaily.com.

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2019-01-23