An aging Canadian population and demand for higher wages are among the factors pressuring small Canadian business owners to sell their companies, according to a seasoned expert in mergers and acquisitions.
Michael Morrow, managing director of merger and acquisitions and capital markets at BDO Canada, is forecasting a rise in the sale of businesses within the next five years compared to the previous half decade.
He attributes that forecast to a lack of succession options for aging Canadian business owners, post-pandemic burnout among entrepreneurs and pressure to match competitive salary expectations amid high cost of living.
“The drivers for business owners to sell that we’re seeing have a lot to do with an aging population and no plans for family members to take over the companies,” Morrow told BNNBloomberg.ca in a telephone interview.
After decades of growing a business and steering it through the pandemic, many owners feel it is time to sell their companies now that their businesses have recovered, Morrow explained. However, many business owners do not have successors in place to take over their operations, he added.
“Another reality that is pushing owners to sell their businesses is the lack of management they have been able to retain since COVID,” Morrow added.
HIGHER WAGE DEMANDS
Demand for higher wages is also posing challenges for small businesses, Morrow said.
Small businesses can’t find the right employees, he said, because qualified candidates are seeking opportunities at larger corporations that can pay higher salaries or offer better employment perks, he explained.
Morrow is observing these trends through clients he works with at BDO Canada which offers accounting, advising and professional services to businesses.
“Someone with 20 to 30 years of expertise in a field is now a highly sought after resource in this labour market and large companies will bid to have them,” Morrow said. “This leaves smaller companies with less competitive options to offer them.”
Another challenge driving business owners to sell is the steep cost of new technology used in business operations today, he added.
“We’re seeing a lot of owners who have been in business for years who are now simply unable or unwilling to invest in the technology needed to bring their companies up to speed. They either