Succession Planning

Small businesses are the backbone of the Canadian economy.

In 2022, 76% of business owners said that they planned to leave their businesses within the next 10 years, which would result in almost $2 trillion of assets changing hands. Of the owners planning to exit, only 1 in 10 have a formal succession plan in place. In addition to the transition of monetary assets, small businesses employed 8.4 million individuals in 2019, which made up 69% of the private labour force. Ontario alone could lose up to $100 billion of its GDP in productive capacity and up to one million jobs. Without a successful transfer of business assets, communities – especially rural communities – would lose access to local products and services, reducing their ability to attract and retain their skilled workforce and population at large.

What is Succession Planning?

Succession or transition planning is the process of preparing a business owner to exit their business while making the way for another entrepreneur to take on the ownership role. This business transfer can occur between the owner and a family member, employee, or a third-party buyer. The main reason that owners exit their businesses is retirement (75%); and of those under the age of 50, 22% exit due to stress/burnout and 21% choose to step away from ownership responsibilities. Over the next 10 years, with the aging population and retirement of baby boomers, Canada’s labour force will face a generational shift. This demographic change will not only decrease the number of workers but will also decrease the buyer pool of those interested in small business ownership, resulting in mass closures.

Bright Ideas Competition

The Bright Ideas Competition is an annual professional growth and idea competition for economic development practitioners delivered by the Economic Developers Council of Ontario. It's purpose is "to give economic developers from across Ontario the opportunity to develop a modern response to proposed topics". In 2023, the Township of Southgate Economic Development Officer participated in the competition and was paired with a colleague from Huron County. The Economic Development Officer was honoured to have received this award alongside her colleague from Huron County with their report on succession planning entitled entitled Public Sector Best Practices for Encouraging Small Business Transitions.