It has been billed as the biggest wealth transfer in history. It is the transition of business assets from the Baby Boom generation to successive generations.
A new survey conducted by CFIB – the Canadian Federation of Independent Business – values the transfer at $1.5 trillion nationally.
In Saskatchewan, the survey showed that 73 per cent of businesses will be changing hands, but only a small percentage of business owners have a plan to make this happen. Fifty-three per cent have no plan at all, while a mere 10 per cent have a written or formal strategy to convert their life’s equity accumulation into cash.
This liquidity event is the way most plan to finance their retirement. Getting it right is critical.
But here are some of the issues at play: Half plan to sell to a third party, while roughly a quarter intend to move it to a family member either through a sale or inheritance. But roughly 60 per cent of those surveyed said finding a suitable buyer is the big problem.