TORONTO—The 2008-09 recession prompted many baby boomer entrepreneurs to delay their retirement plans and stay in business longer than they had anticipated, according to a new report.
The Canadian Federation of Independent Business (CFIB) report, Passing on the Business to the Next Generation, found 23 per cent of business owners have delayed their exit dates between one and four years.
Only five per cent said the economic downturn prompted them to accelerate their exit date.
“The recession clearly had an impact on succession planning,” CFIB vice-president of research Doug Bruce said in a statement.
“Instead of passing the business on to the next generation, some small business (owners) decided to hold onto their business until its value returned to pre-recession values.”
While estimates vary, the CFIB says Canadians will see a massive transfer of small business assets in the next decade—possibly more than a trillion dollars.
The report found that almost half of small and mid-size enterprises (SMEs) currently have a succession plan in place.
Out of these small business owners, one half will exit their businesses in the next five years, according to the CFIB.
“Small business is the backbone of the Canadian economy, and succession planning is critical to the long-term future of small business,” CFIB president and CEO Dan Kelly said.