Small Business Owners Heading Into Retirement May Be Underestimating Value of Their Business: Scotiabank Study


TORONTO, ON--(Marketwired - February 25, 2014) - According to a recent Scotiabank poll, a quarter of Canada's small business owners (26%) expect their RRSP contributions to be their primary source of income in retirement, followed by proceeds from selling their business (17%), their savings (15%) and government pensions (8%).

The study also found that one-quarter (25%) of small business owners have not thought about what they want to happen to their business when they retire, while only two-in-ten (19%) say they have a succession plan in place.

Additional findings:

  • On average, small business owners expect to retire at age 65, while nearly two-in-ten (18%) are uncertain at what age they will be ready to retire. Just over one-in-ten (14%) say they have no plans to retire.
  • Overall, 52% of Canadians hold an RSP, with 31% planning to contribute to their RSP this year, a decrease from 39% in both 2012 and 2011.*
  • Finding and keeping customers (42%) is the most frequently cited concern of small business owners followed by competition in the marketplace (36%) and the health of the Canadian economy (30%). Concern about succession planning ranks lower with only 19% noting this as a pressing issue.
  • Small business owners think that a succession plan should be in place almost 7 years prior to retirement.
  • Small business owners are most likely to turn to an accountant (25%) first for help in developing a succession plan, followed by a financial planner (18%). 
  • 68% of small business owners currently have a business plan, while just 27% of Canadians have a written financial plan*.

* Source: Scotiabank Investment Poll


"It's interesting to see that while overall RSP contributions are lower this year among Canadians generally, small business owners rank it at the top of the list as a source of income in their retirement years, while potentially overlooking the value their business could add to their nest egg," says Tina Di Vito, Director of Business Succession at Scotiabank. "Business owners are passionate about what they do, and we want to encourage them to take a look at both their business and personal balance sheets to make the most of their retirement years."

"Scotiabank's team of advisors across the country are ready to help Canadians grow their small businesses so when the time comes for them to retire, they have a profitable business to sell," says John Roberts, Vice President of Small Business at Scotiabank. "For those who plan to keep their business until they retire, it's never too early to put a plan in place to help ensure the best long term prospects for the company they have worked so hard to build; to generate the best possible sale price and to make sure the business is properly prepared for successful transition to new ownership."

Succession Planning Tips

The following checklist identifies steps to help ensure the best outcomes from the transfer of ownership of a business:

  1. Have a well thought out and clearly documented plan.
  1. Have contingency plans in place to deal with unplanned, catastrophic circumstances that could jeopardize your business and your family in the short term.
  1. Establish a target date to transfer ownership of your business.
  1. Know the current value of your business and have a target value established for the ultimate sale price of your business.
  1. Consider your exit strategy. Will you be transferring your business to a family member or selling to a third party?
  1. Have a plan in place that will maximize the value of transferrable assets and protect that value of your business up to the planned transition date.
  1. Assemble a team of advisors to deal with the various aspects of ownership transfer.

In addition to visiting any Scotiabank branch to speak with small business and financial advisors, small business owners can also visit for free information, tips, blogs, whitepapers, videos, webinars and more to help them with their business needs.



  Total Atlantic Quebec Ontario Prairies BC
RRSP contributions 26% 21% 18% 31% 28% 26%
Proceeds from sale of business 17% 15% 26% 10% 21% 14%
Savings 15% 7% 16% 19% 13% 13%
Government (e.g., CPP, Income Security Program) 8% 17% 4% 8% 11% 6%
Haven't given this much thought 8% 3% 12% 9% 7% 4%
Sell home/other assets 6% 9% 6% 7% 3% 7%
Income from investment property 6% 11% 7% 3% 5% 13%
Inheritance 2% 2% 2% 1% 0% 6%
Use equity in home 2% 2% 1% 4% 1% 2%
Win the lottery 1% 0% 2% 1% 1% 2%


  Total Atlantic Quebec Ontario Prairies BC
Average age of expected retirement 65 66 66 64 65 65
Never plan to retire 14% 25% 15% 8% 17% 16%


  Total Atlantic Quebec Ontario Prairies BC
1-2 years before retirement 12% 10% 7% 16% 9% 16%
3-4 years before retirement 16% 16% 17% 12% 20% 19%
5-10 years before retirement 15% 24% 13% 17% 10% 18%
More than 10 years prior to retirement 13% 10% 21% 11% 10% 10%
Already have a succession plan in place 19% 19% 15% 19% 26% 13%
Don't know 25% 21% 28% 25% 24% 24%
Average number of years succession plan should be in place before retirement 6.8 6.7 8.5 6.5 6.3 6.0

About the polling data

Scotiabank Small Business Poll: For this survey, TNS Canada conducted online interviews among 501 owners/partners of small businesses with under $5 million annual revenue. In tabulation, data was weighted to be representative of the small business universe in terms of annual revenue and region. The survey was conducted between September 25 and 30, 2013.

Scotiabank Investment Poll: This study was conducted online for the third consecutive year using Harris/Decima's online panel. A total of 1,029 completed surveys were collected from a random sample of panel members across Canada. The study was conducted from November 12, 2013 to November 27, 2013.

About Scotiabank
Scotiabank is a leading financial services provider in over 55 countries and Canada's most international bank. Through our team of more than 83,000 employees, Scotiabank and its affiliates offer a broad range of products and services, including personal and commercial banking, wealth management, corporate and investment banking to over 21 million customers. With assets of $744 billion (as at October 31, 2013), Scotiabank trades on the Toronto (BNS.TO) and New York Exchanges (BNS). Scotiabank distributes the Bank's media releases using Marketwired. For more information please visit

Media inquiries:

Kate Simandl
Scotiabank Media Communications
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