Up to 7,900 N.B. small business owners will retire over next two decades, says APEC
The next 20 years will likely see big changes in small business ownership in New Brunswick as more owners look at retirement.
The Atlantic Provinces Economic Council expects some 25,000 small businesses in Atlantic Canada could change hands or be shuttered as owners reach retirement age.
It's yet another side effect of the region's aging population.
Fred Bergman, a senior policy analyst with APEC, said in New Brunswick about 7,900 self-employed business owners may soon be looking to sell, transfer or close their businesses.
Bergman said while this is a "fairly large number", it is all part of the natural life cycle of business.
"Just like the life cycle of a person, a business also has a life cycle," said Bergman.
"When that person ages, they're either going to transfer to one of their children or a relative, a family member, or they're going to want to sell it to someone else or they could close it. And in the extreme, if they're losing money, they may even go bankrupt or insolvent."
Succession planning
Bergman expects this will contribute to an economic slowdown over time because fewer businesses will be operating, and retiring owners may be on fixed incomes and spending less.
"You're going to have a bit of a slowdown if some of these businesses don't change hands," said Bergman.
"So succession planning becomes very important for these businesses."
While simply selling or transferring a business is a possibility, he cites what his barber is going through with his business as a good example of what can be done.
"He sold his business to another hairdresser," said Bergman.
"He stayed on, along with one of his former employees, to kind of help introduce them to his customer base. So they're effectively taking over the old customer base, but the business as well to kind of maintain customers because it's very hard to acquire new customers versus retaining existing customers sometimes."
Of course, Bergman said this takes planning and shouldn't be done too quickly.
"You don't want to leave it to the last minute; you certainly want to do it within the last five years," said Bergman.
"When you start seriously thinking about retiring, you should be planning ahead."
