With ongoing uncertainty caused by the COVID-19 pandemic, 37 per cent of Canadian business owners wish they could retire, transition or sell their business – but they’re not prepared, according to a recent KPMG poll
"With the COVID-19 pandemic, many business owners have been forced to make tough decisions around investments needed to manage through the crisis and beyond," said Yannick Archambault, national family office leader for KPMG in Canada.
"But these kinds of decisions require serious planning and the persistent economic uncertainty posed by the pandemic has accelerated the normal planning timeframe for these decisions. As a result, there is a greater urgency today to have robust, forward-looking plans in place and solidify leadership and governance structures to protect the business and facilitate a transition."
According to the findings, about 24 per cent of respondents who don't have an exit plan but want to leave within one to two years, regret not having sold or transitioned their business before the pandemic.
Many business owners not prepared
But some 60 per cent do not have audited financial statements, while three-quarters do not have a governance framework or structure in place.
When it comes to family businesses, 28 per cent of respondents who are ready to retire feel they have to stay on with the company because their successor isn’t prepared to take over, nor have many of them invested in technology.
"Now more than ever, businesses need to be proactive and invest in digital and emerging technologies, whether to facilitate remote work or online sales, services and support," said Mary Jo Fedy, national leader, KPMG Enterprise. "The prevailing belief that digital transformation is driven by the next generation of leaders could also influence future thinking about succession planning."
KPMG suggests business owners plan early for the future, prepare the business by reviewing the company’s financial records, get a valuation of their business, prepare their family and groom their successor.
