Many have been talking about the big change that will hit the business world as the baby boomers retire. Now it’s finally happening. The owners and leaders of Canadian private and family businesses have started to exit the workforce in huge numbers, and business valuations are at record highs. The result is an unprecedented transfer of wealth and responsibility, but will the current generation of leaders sell or pass the reins to their successors? The next few years will have a profound impact on the future of this country and its private and family businesses.
70% of private and family business owners are planning to sell or pass on their business over the next few years
Private and family businesses contribute approximately $1.3 trillion to Canada’s GDP
of jobs in North America are created by private and family businesses—providing work for more than 12 million Canadians
private and family businesses will be changing CEO or ownership in the near future
Canada’s position is unique: 70% of private company owners are planning to sell or pass on their businesses in the next few years—businesses that contribute nearly two-thirds to the country's gross domestic product (GDP). This wealth transfer will pose a challenge for both the current generation and their successors, but it also promises to be a once in a lifetime opportunity.
The size, scope and nature of your transfer is as unique as your business. If you’re wondering where to start, we’ve created a journey map outlining the Canadian private and family business landscape and the paths existing business owners could take.
If managed properly, this wealth transfer could mobilize a new wave of prosperity and growth. But mistakes could be costly for everyone, leading to a weaker economy, loss of employment and an erosion of the tax base that supports our infrastructure and public services. There are challenges ahead, but the rewards of a competitive and newly-energized private business sector are even greater.
Our Once in a lifetime series shines a light on the Canadian private and family business landscape, providing insight into the key issues, opportunities and outcomes for the sector. The goal is to help you make the best decisions possible—for your company, your legacy and the next stage of your business. Because if a transition of this scale only happens once in a lifetime, we need to get it right.
Age isn’t the only demographic indicator that will change during the current transfer of wealth. Presently, a quarter (25%) of all board members for Canadian family businesses are women, and a similar proportion of women are on the management team (26%). But women comprise more than a third of the next generation currently working in their family businesses.
This is fantastic news for Canadian business, because diversity brings more views and voices to the table and allows companies to better serve their customers. It’s no wonder that businesses that have both men and women on their senior leadership teams are outperforming their non-diverse competitors.
The great Canadian wealth transfer will not only see the emergence of a new generation of owners, it will also start to create a more gender-balanced leadership. We're hopeful this trend will continue into the future, so that private and family-run companies can achieve equal gender representation at all levels.
The transition of wealth taking place for Canada’s private and family businesses is unprecedented in scale and it presents a once in a lifetime opportunity to set this country up for years of continued success. The owners of today will enjoy a prosperous business exit while the leaders of tomorrow will be primed to run more diverse, innovative and inclusive companies. Private and family businesses will continue to be a critical driver of the Canadian economy.