Search Blog
  • Alan Fustey
  • Arthur Salzer
  • Becky Wong
  • Bert Griffin
  • Blair MacDougall
  • Blake Goldring
  • Brett Baughman
  • Camillo Lento
  • Chris Delaney
  • Chris Vermeulen
  • Christine Conway
  • Cynthia Kett
  • Darren Long
  • Desmond Jordan
  • Don Shaughnessy
  • Doug Lamb
  • Ed Olkovich
  • Ed Rempel
  • Ellen Roseman
  • Eva Sachs
  • Evelyn Jacks
  • Gail Bebee
  • Gerald Trites
  • Gordon Brock
  • Gordon Pape
  • Guy Conger
  • Guy Ward
  • Heather Phillips
  • Ian Burns
  • Ian R. Whiting
  • Ian Telfer
  • Jack Comeau
  • James Dean
  • James West
  • Jeffrey Lipton Fairmont Gloucester
  • Jim Ruta
  • Jim Yih
  • Joe White
  • John Winston
  • Jonathan Chevreau
  • Kenneth Eng
  • Kevin Ikeno
  • Larry Weltman
  • Malvin Spooner
  • Mark Borkowski
  • Marty Gunderson
  • Michael Kavanagh
  • Monty Loree
  • Nick Papapanos
  • Norma Walton
  • Paragon International Wealth Management
  • Pat Bolland
  • Patrick O’Meara
  • Paul Brent
  • Paul Mascard
  • Peter Deeb
  • Peter Lantos
  • Riaz Mamdani
  • Richard Crenian
  • Richard Warke
  • Rick Atkinson
  • Rob Peers
  • Robert Bird
  • Robert Gignac
  • Sam Albanese
  • Sam Mizrahi
  • Sean Cooper
  • Stephane Ruah
  • Steve Nyvik
  • Steve Selengut
  • Tammy Johnston
  • Terry Cutler
  • Trade With Kavan
  • Trevor Parry
  • Trindent Consulting
  • Wayne Wile
  • Categories
    July 2012
    M T W T F S S
    « Jun   Aug »


    Not Able to Find a Sale Solution for your Company

    Mark Borkowski

    Canadian business owners are undecided about a planned exit strategy and a vast majority is unsure how, when or to whom they will turn over their business.

    According to a recent Harris/Decima study commissioned by BMO Bank of Montreal, more than half (56%) of businesses polled are in the later stages of their enterprise and yet only 21% of these business owners have decided on or named a successor. Of those businesses who do not have a succession plan in place, 40% believe it is too early to do so.

    Yet, in stark contrast to this claim, more recent business owners see the value in putting a formal succession plan into place earlier in the business lifecycle. Only 19% of business owners have identified a successor, yet just under a third of those have a transition plan in place, with training times widely varying.

    “Our research and experience advising business owners across Canada shows that many of them are unprepared for the inevitable” said Sean Foran, Vice President of Succession Planning at BMO Harris Private Banking. “Whether they intend to sell their business or hand it down to a family member, it’s important they begin planning as early as possible to ensure they get the most out of the many years of work they have put into the business.”

    Other highlights of the survey revealed:
    • Almost 40% of respondents say their ideal succession plan would include selling their business to an outside party
    • Only 17% said they would sell the business to a family member
    • One quarter of respondents say they have no interested family members and 17% say they have no family members who could take it over
    • 85% of business owners say they are the first or second generation of the family that started the business
    “These findings reflect the mindset of a typical entrepreneur,” said Gail Cocker, Senior Vice President, Commercial Banking, BMO Bank of Montreal. “Most
    Business owners are so focused on growing and maintaining their business they find it difficult and even emotionally draining to contemplate selling or winding it
    down. Our best advice is to speak to one of our commercial bankers. They can provide guidance and direction on how to put a succession plan in place.”

    Business owners are overwhelmingly intent on using the proceeds from the sale of their business as investment dollars. In fact, two-thirds of business owners surveyed say they will invest their business sale dollars — nearly the same numbers who intend to fund their retirement through RRSPs or other investments.

    However, 61% intend to rely in part on the Canada Pension Plan to get them through their retirement years.

    “Clearly some entrepreneurs are concerned the sale of their business will not sufficiently subsidize their retirement lifestyle,” said Foran. “That’s why it’s important they maximize the proceeds of the sale of their business by investing that money wisely with the aid of a professional advisor.”

    Almost three-quarters of those surveyed are more than five years away from selling their business, providing ample opportunity for a carefully planned exit strategy.”

    Mark Borkowski, president Mercantile Mergers & Acquisitions Corporation, (416) 368-8466 ext. 232. Mercantile specializes in selling mid market companies to private equity funds or strategic buyers.

    The MONEY® Network