When it comes to succession planning, business owners in Canada and the United States are woefully unprepared, according to a BMO Financial Group poll. However, Canadian business owners are significantly more optimistic about the prospects for the domestic economy compared to their American counterparts.
A majority (82 per cent) of business owners in both countries said they have not yet identified a successor for their businesses for when they retire. Forty per cent of this group said they believe it is too early to start thinking of a succession plan.
"With the first wave of baby boomers approaching retirement age, we are going to witness the exit of a large number of business owners within the next five to 10 years," said James Wong, director of succession planning at BMO Harris Private Banking. "In order to maintain the momentum and financial health of a business, it is essential for business owners to have a succession plan in place before they exit."
More than one-quarter (27 per cent) of Canadian business owners said the recession has not led to any change in their exit plans compared to 63 per cent of their U.S. counterparts. But U.S. business owners plan to exit their businesses later (68 years of age) compared to Canadian business owners (62 years of age).
While 88 per cent of 650 U.S. business owners surveyed described the U.S. economy as being in recession, 45 per cent of 650 Canadian business owners said their country is experiencing a period of growth.
"It is encouraging to see that Canadian business owners are optimistic on the state of the Canadian economy," said Cathy Pin, vice-president of commercial banking at BMO Bank of Montreal. "This outlook may help drive business owners to take advantage of opportunities for growth. Whether it's boosting productivity or investing in new business opportunities, confidence in the economy will help Canadian businesses continue to strengthen their position at home and abroad."
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