Distinct Capital Partners (“DCP”) is an Oakville, Ontario based investment banking firm that provides corporate finance, M&A and advisory services to small and mid-market Canadian private companies. Their clients are primarily owner operated businesses, meaning they are well positioned to advise on the looming sale of what CIBC says will be an estimated $1.9 trillion dollars worth of business assets transferring hands from the baby boomers to the next generation.
DCP’s founder, Donald Hilton recently wrote about CIBC’s findings in the company’s newsletter which is reprinted below. To read more you can follow CBC’s coverage.
The wave of retirement among “baby boomer” business owners about to hit us will represent the biggest transfer of economic control in this country’s history.
“According to CIBC, an estimated $1.9 trillion in business assets are poised to change hands over the next 5 years, $3.7 trillion over the next 10 years – the biggest transfer of Canadian business control on record.”
CIBC said half of all small and medium-sized businesses in Canada are set to retire over the next decade, including 310,000 that plan to transfer control of their companies within the next five years. Survey after survey has shown that business owners are ill prepared for the inevitable ownership transition that is quickly approaching and close to 60 per cent of business owners aged 55 to 64 have yet to start discussing exit plans with their family or business partners.
What does all this mean for you the small business owner? The increasing supply of businesses for sale over this time period will create a buyers’ market putting downward pressure on sale prices. Without the implementation of a proper plan, business owners will find themselves selling for a significant discount to those that come to the market well prepared. Your business exit and continuation plan should address, among other things, how to enhance and maximize the value of your business.
After dedicating yourself to building your business you want to make sure all the hard work pays off when it’s time to sell, transfer or pursue which ever exit strategy suits you. That’s why you need to be proactive and start preparing for your exit today. At Distinct Capital, we will design an effective value enhancement program including a detailed market valuation to best position your business for sale.
We have been in your shoes with our own businesses and can offer you the first-hand knowledge and expertise to ensure your exit plan is comprehensive and tailored to your specific goals that will maximize your sale price. We will advise you on the critical steps for developing your Exit Plan and follow a formalized process for divesting of your business interest which includes finding the right buyer, managing the entire sale process and representing you in negotiations with buyers.
Donald B. Hilton,
Founder and Managing Partner
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