Why a Business Succession Plan is Critical in Canada’s Current Economic Climate
- Ernest Bednarz
- Apr 3
- 3 min read
In today’s uncertain economic environment, Canadian business owners face increasing pressure to plan for the future. Whether due to rising interest rates, changing tax policies, the risk of tarriffs or the wave of retiring entrepreneurs, having a business succession plan is no longer optional - it’s essential.
A structured succession plan ensures a smooth transition, maximizes business value, and protects both owners and employees. In this article, we’ll explore why business succession planning is more important than ever in Canada’s current economic climate, and offer an exclusive 35% OFF (up to $5,000) for the first five clients who secure our new business succession planning services.
Rising Interest Rates & Financing Challenges
High interest rates in Canada have made it more expensive for buyers to finance business acquisitions. Without a succession plan, potential buyers - including family members or employees - may struggle to secure financing, forcing owners into last-minute sales at lower valuations or worse.
Solution: Structuring a succession plan in advance allows for creative financing solutions like:
Vendor take-back financing
Employee Ownership Trusts (EOTs)
Gradual buyouts to ease financial burdens
Avoiding High Tax Burdens
Without proper planning, selling a business can trigger significant capital gains taxes, reducing the net proceeds for owners.
Tax-Optimized Succession Planning Can Help:
Lifetime Capital Gains Exemption (LCGE): In 2024, owners of Qualified Small Business Corporations (QSBCs) can exempt up to $1,016,836 from capital gains tax.
New Employee Ownership Trusts (EOTs): Sellers can now defer capital gains tax for up to 10 years when transitioning ownership to employees and until 2026 if not extended further can shelter up to $10 Million in Capital Gains.
Strategic planning maximizes business value while minimizing tax liabilities putting more money in your retirement pocket.
The Next Wave of Retiring Business Owners
A wave of retirements is coming. The Canadian Federation of Independent Business (CFIB) estimates that 76% of business owners will exit within the next 10 years.
Without a plan in place:
Many businesses may shut down instead of selling
Families may struggle to continue the business
Employees may face job insecurity
A proper succession plan ensures continuity, financial stability, and long-term success.
Market Uncertainty & Business Risk
Market fluctuations, inflation, and global supply chain issues all create financial uncertainty for Canadian businesses.
Without a succession plan, an unexpected crisis could lead to:
Business devaluation
Customer loss
Employee turnover
Proactive planning protects against risk by ensuring leadership stability, bench strength, operational continuity, and a smooth transfer of ownership.
Secure Your Business’s Future With A Succession Plan Before It's Too Late
The reality is clear, business succession planning is no longer just an option - it’s a necessity. The marketplace is about to get crowded.
With rising interest rates, tax burdens, and a wave of retiring business owners, failing to plan could mean leaving money on the table or, worse, seeing your business close instead of transition successfully.
That's where we come in at Malahat Valuation Group! Our brand new business succession planning services are right at your fingertips. Our trusted advisors will help you strategize to improve the value of your business and help prepare you for when you decide to take those next steps.
BONUS: The first 5 clients to use our new services will receive 35% off (up to $5000). This is your chance to sell smarter, save on taxes, and secure your legacy.
⬇️ SECURE YOUR SPOT HERE ⬇️
Malahat Valuation Group specializes in business valuation and real estate appraisals to owners of privately owned companies and their professional advisors.
When owners need to leverage, sell or reorganize their assets, we answer the age-old question "What is it worth?".
We provide our clients and their advisors peace of mind by preparing professional valuations that stand up to scrutiny from lenders, the Courts, and the Canada Revenue Agency.
Malahat Valuation Group Inc.
(250) 929-2929
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