Exit and succession planning for small business owners
If you're thinking about what comes next, you're not alone. Here is a simple way to plan your exit.
Many owners are in the same position
In its 2023 Succession Tsunami report, the Canadian Federation of Independent Business (CFIB) found that 76% of owners plan to exit their business within the next 10 years, and that only about 1 in 10 have a formal succession plan.
Your main options
- Pass it to family.
- Sell to employees or managers.
- Sell to an outside buyer.
- Wind it down and sell the assets.
Each has different legal and tax results, so talk with your lawyer and accountant before you choose.
A simple timeline
- 3 to 5 years out: decide your goals, tidy your records, and reduce how much the business depends on you.
- 1 to 2 years out: get a value, speak with your accountant about tax, and start looking for a buyer or successor.
- The final year: agree terms, complete the sale and train the new owner.
Selling to your team
Thinking of an employee or manager? Read How to sell your business to an employee.
Get your business ready
Read How to prepare your business for sale for practical tips.
Get the free checklist
Our printable Exit Plan Checklist (PDF) walks you through each step.
Ready to look for a buyer? Read How to sell your business without a broker.
Common questions
What is a succession plan?
It's a plan for how and when you will leave your business, and who will take it over. It can be simple or formal. A formal plan includes the legal and financial documents needed to carry it out.
When should I start?
Earlier is better. Planning a few years ahead gives you time to tidy your records, train someone and find the right buyer.
What if no one in my family wants the business?
That's common. CFIB found that selling to an unrelated buyer is one of the most common exit plans.
Sources
Ready when you are
Listing is free and takes about 10 minutes. Your details stay private until you choose to share them.