Survey finds next generation disinterested in taking over family business

Not ready, or not willing?

Canadian entrepreneurs are concerned their offspring aren't ready or are unwilling to take over the family business.

A report by the Family Enterprise Foundation found half of family business owners share the concern about transition of their business.

A big wealth transition is now underway, the foundation says, with ownership of more than 60 per cent of family enterprises expected to be handed off within the next decade.

"The clock is ticking! Whether ready or not, transfers within Canada’s family businesses are coming soon. It's imperative that family business leaders prepare their family, as well as their business, for this imminent transition of wealth, ownership and leadership," says foundation general secretary Olivier de Richoufftz.

The research was conducted by Abacus Data and is summarized in the report, Ready, Willing and Interested – or NOT?

The main concern among 51 per cent of owners is that the next generation isn't ready. Meanwhile, 39 per cent say their kids aren't interested in taking over.

"After spending most of their lives working to build a strong and successful family business, founders may assume that their children share their passion and drive, but this is not always the case. Having meaningful conversations about the future is a critical first step to family wealth and continuity planning," says Richa Arora, a family advisor with KPMG.

Half (52 per cent) of respondents expect to transition the business to family, while one-third (36 per cent) are planning to sell.

The most-cited reason among those looking outside the family is disinterest/lack of experience among family members.

The success of the upcoming wave of transitions is vital to the Canadian economy, the foundation says, as family businesses employ seven million people.

The survey was conducted June 3-11 with 300 Canadian business owners, involved in family-owned businesses with 20 or more employees.

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