Did You Know - Major challenges face family businesses today

  • 17% of family units held equity in a business.1
  • By the year 2013, 41% of business owners in Canada are expected to exit their businesses2.
  • Over 60% of entrepreneurs age 55 to 64 have yet to discuss their plans with their families.
  • The primary reason for this: They think it's too early!

These statistics are important because transitions of businesses are typically not successful. In fact, 72% of family assets will be gone within the first and 90% within the 2nd generation3, the reasons for such a significant track record of failure in successful transfers amounts to lack of trust, lack of communication and unprepared heirs. Lack of or out of date succession planning is another major factor.

Addressing and working to avoid such business succession failures is an important component of wealth management for the Canadian economy.

For this reason we are pleased to present Succeeding in Business Succession, a series of five "Did You Know" information segments featuring instruction from financial advisor Douglas Nelson, author of Advising Family Business, a certificate course from The Knowledge Bureau. This new course has be chosen for students in the Retirement Income Specialist program leading to the MFA Designation, for its importance in helping advisors understand the important issues business owners face in transitioning the firm or farm to a new generation.

So, what keeps business owners from planning? Check it out in Breaking Tax and Investment News and knowledgebureau.com.

NEXT TIME: Working in or on your business?


1 Statistics Canada 2007
2 CFIB Survey 2007
3 William Group Survey and Preparing Heirs 2003