Many Canadian business owners are unprepared for retirement, and few have a succession plan in place, a new study shows.

According to a recent RBC study on succession planning, while one in four business owners is considering exiting their business within the next five years, only 23% of them have a succession plan in place.

“Even if retiring is the furthest thing from their mind, all business owners need to plan for their future,” says Nadia Ceciliot, national manager, commercial financial services, RBC Royal Bank. “We know that they are very busy and focused on the daily demands of running their business. But no matter what stage they are in, having a succession plan in place will help ensure a smooth transition in the future — not only for the business, but also for the business owner and his or her family.”

There may be a number of reasons why business owners do not focus on succession planning. Some feel they just do not have the time; others may find it difficult to consider a time when they’re not in charge while some may not know how to get started.

Building a succession plan takes time and requires professional advice, RBC says. The execution of a plan can take anywhere from three to five years to complete. The benefits of proper planning include maximizing the value of a business and maintaining control over what happens in the long term.

“It’s important to note that the creation of a plan is a multidisciplinary process – the key to which is getting the right help. No one should do it on their own,” adds Ceciliot. “When owners start or grow a business, they rely on advice from their peers, family, employees, accountants, lawyers and financial institutions. It is no different when creating a succession plan.”

Throughout October and November, in cities across Canada, RBC will host “Find Success in Succession” events across Canada to help business owners start their succession planning. The events will be facilitated by Peter Legge, founder, Chairman and CEO of Canada Wide Media Ltd, who will share his recent succession experience and then be joined by a panel of advisors.

IE