Across the province, British Columbian entrepreneurs and business owners are planning to sell but may not be prepared for the transition, warns a survey by the Business Development Bank of Canada.
The survey, released Wednesday, indicates four out of 10 entrepreneurs in B.C. plan to give up their business over the next five years. Pierre Cléroux, BDBC's chief economist, said many of the owners will be up for retirement in the next few years.
"We often talk about our aging population in Canada but something that we don't really talk about is the fact that our Canadian entrepreneurs are getting old as well," Cléroux told CBC's host of The Early Edition Rick Cluff.
Almost 60 per cent of small and mid-sized business owners are 50 years old or over, the survey found. Cléroux said the coming wave of retirement will create a boom in business transitions.
"There is going to be a major change," Cléroux said. "I'm not too worried that there is going to be a lot of transition but the negative impact on the economy is the fact that when we ask them, 'How much are you investing now,' we realized that a lot of entrepreneurs who are thinking about selling, they just stop investing in their business."
This is partly due to owners shying away from risk before selling; more than half the respondents in the survey said they had no interest in expanding and 71 per cent said they were reluctant to take risks to improve their business's performance.
Cléroux was adamant that investment, and the risk that comes with it, is a necessary part of transition. He compared selling a business to selling a house — you have to take the steps necessary to improve it and make it attractive to buyers, he said.
More than half of entrepreneurs plan to transfer their business outside the family, and, Cléroux said, this means there are a lot of upcoming opportunities for young people looking to buy or run businesses.
"It's a great time for young people, if they are interested in having their own business, there are going to be a lot of businesses for sale in the next five years."
To listen to the full interview, click on the audio link below:
With files from The Early Edition.