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Small Business Owners Urged to Plan for Succession
Published on Jun 14, 2011
Check out 'Small Business Owners Urged to Plan for Succession' at 'Time to Start Up,' the small business blog by BizFilings.
Small business owners wanting to keep ownership in the family will need to turn to succession. But according to the Business Owner’s Toolkit, succession should be a gradual process instead of an immediate one.
While it may be tempting as a business owner to simply hand over control of the business to the closest family member and ride off into the sunset, this tactic does not lend itself to fruitful successions.
According to Toolkit, only 30 percent of family-owned businesses survive with the first succession and only 15 percent will make it to a second succession. While these numbers can partially be contributed to external factors such as the state of the economy, small business owners are urged to be proactive throughout the succession process.
Another issue arises when business owners refuse to accept the inevitability of succession. A recent survey in Canada by the Canadian Institute of Chartered Business Valuators found as many as half of Canadian businesses lacking a succession plan despite nearly 70 percent of business owners set to retire in the next nine years.
"Business owners and leaders are pulling up stakes in a boomer-led management exodus over the next decade," the report said, according to the Winnipeg Free Press.