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Transition Planning

The Importance of Business Transition Planning

Call to action buttonNumerous recent studies highlight the fact that most business owners are not ready to exit:

  • According to a survey by PriceWaterhouse Coopers, 12 months after selling, 75% of business owners surveyed “profoundly regretted” the decision to sell
  • According to CIBC “In Focus”, “close to 60% of business owners aged 55 to 64 have yet to start discussing their exit plans with their family or business partners”
  • According to the Family Firm Institute, only 30% of family-owned businesses survive into the second generation
  • According to the Exit Planning Institute’s 2013 State of Owner Readiness Survey, 2/3 of business owners are not familiar with all their exit options, and 49% of have done no exit planning at all
  • According to the September 2015 Expert Panel at the Vancouver Association for Corporate Growth (ACG) “State of the Market” luncheon, “The most common deal-killer: Sellers not being ready”

However, with the “baby boomers” generation of business owners reaching retirement age, there may be competition among business owners to find a good buyer. A CIBC “In Focus” report in November 2012 forecasted the “business exit rate to rise rapidly in the coming decade”, and estimated that 40% of British Columbia business owners plan to exit their business in the next five years.  Those owners who have readied their businesses for exit, and whose businesses are optimized for transition to a new owner, will have a tremendous advantage over those that have not addressed their business exit plan.

 

To learn how to prepare for a future business transition, contact us for a free, no obligation consultation.