Canada’ Small Businesses and Covid-19 Pandemic
Owners of small and medium-sized enterprises are pondering succession plans, but few have one in place.
Most of Canada’s 1.2 million small- and medium-sized enterprises have been affected by COVID-19. A substantial number of them remain heavily indebted as pandemic restrictions ease, while workforce shortages and supply-chain disruptions are still a problem.
The pandemic has added to the looming succession crisis for these companies due to the growing number of owners nearing retirement who do not have a formal plan in place for the continuity of their businesses. Economic experts in the United States and the European Union have also been warning of a similar phenomenon on the horizon for more than a decade. Overall, Canadian business owners aren’t prepared for succession or for the impacts of crises on their companies. Jobs and the socio-economic well-being of Canadian communities are potentially at risk.
In Canada, a recent study revealed that most business owners first think of transferring their companies to their children or other family members while retiring owners or those with businesses at risk seek to sell to third-party investors. The study also revealed that less than half of retirement-aged owners, 48 per cent, are familiar with the intricacies of succession, while only 14 per cent having formal succession plans in place.
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