Even though they are aging, majority of Canadian private company leaders do not have succession plans

    TORONTO, Aug. 21 /CNW/ - Fifty-four percent of Canadian private company
business owners do not have a plan outlining the future ownership of their
business. Furthermore, according to the latest PricewaterhouseCoopers (PwC)
Business Insights(TM) Pulse survey PwC Business Insights, this rises to over
70% of companies when looking at businesses with revenues less than
$10 million.
    "Planning for succession is one of the toughest challenges a business
owner can face," says Carla Eisnor, a PwC Partner specializing in helping
owners realize the value of their companies on selling. "These entrepreneurs
can have decades of experience managing a business but for most of us planning
our own succession is a once in a lifetime event."
    Sixty-two percent of respondents stated that the current owner/CEO of
their business is between the age of 51 and 70 and one in three companies have
CEOs retiring in five years or less. Combined with percentage that do not have
a plan in place a worrying picture is emerging. Eisnor explains, "A robust
succession plan often requires a multi-year timeframe so it's imperative that
companies address this issue sooner not later."
    Just over a third of all businesses reported they planned to pass their
company to the next generation with more than another third looking to sell to
either an outside party or existing management or employees. However, more
than one in ten report not knowing what will happen to their business when the
CEO retires, even though the greatest concern cited, by almost half the
respondents, is receiving the maximum value from their business during
ownership transition.
    Thankfully, those respondents who are concerned with realizing the value
are also the group most likely to have a succession plan. But that still
leaves one in three respondents who wish to maximize value but haven't planned
how to do it yet. "If you don't plan and understand where potential future
opportunities exist, then you run the risk of not maximizing the cash that can
be made on exit of your company," says Eisnor.
    This is the third in a series of Business Insight Pulse Surveys from PwC
that aim to provide snapshots of the current business environment and
sentiment for Canada's private companies. For more information please visit
www.pwc.com/ca/pulsesurvey or contact Carolyn Forest,
carolyn.forest@ca.pwc.com, 416-814-5730.

For further information:

For further information: Carolyn Forest, PricewaterhouseCoopers LLP,
(416) 814-5730, carolyn.forest@ca.pwc.com

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