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BMO North America Business Study: Canadian Business Owners More Upbeat On Economy Than U.S. Counterparts

TORONTO, Ontario, November 29, 2010 — BMO Financial Group today announced the results of a cross-border survey revealing that Canadian business owners are significantly more optimistic about the prospects for their domestic economy compared to their American counterparts.

The study, conducted by Harris/Decima for BMO Financial Group, found:

  • The overwhelming majority of U.S. business owners (88 per cent) describe the U.S. economy as currently being in recession.
  • At the same time, almost half (45 per cent) of Canadian business owners say their country is experiencing a period of growth.
  • When it comes to succession planning, the vast majority of business owners in both countries (82 per cent) have not yet identified a successor for their business for when they retire. Forty per cent of this group believe it is too early to start thinking of a succession plan.
  • U.S. business owners plan to exit their businesses later (68 years of age) compared to Canadian business owners (62 years of age).

“It is encouraging to see that Canadian business owners are optimistic on the state of the Canadian economy,” said Cathy Pin, Vice President of Commercial Banking, BMO Bank of Montreal. “This outlook may help drive business owners to take advantage of opportunities for growth. Whether it’s boosting productivity or investing in new business opportunities, confidence in the economy will help Canadian businesses continue to strengthen their position at home and abroad.”

Sentiment about the Canadian economy is also reflected in business owners’ views on succession planning, with 27 per cent of Canadian business owners saying the recession has not led to any change in their exit plans. However, their U.S. counterparts are more likely to say they are not thinking about exiting their business at this time given the current state of the economy (63 per cent).

“Canadian businesses have plenty of reason to feel good about their economy compared with American owners, given solid consumer spending, strong demand for commodities and readily available credit,” said Sal Guatieri, Senior Economist, BMO Capital Markets.

“With the first wave of baby boomers approaching retirement age, we are going to witness the exit of a large number of business owners within the next five to 10 years,” said James Wong, Director, Succession Planning, BMO Harris Private Banking. “In order to maintain the momentum and financial health of a business, it is essential for business owners to have a succession plan in place before they exit. Start off by speaking with experts – including your financial advisor – who can help you take the first steps in developing a plan.”

The online survey was completed by Harris/Decima between September 22 to October 10, 2010 using their proprietary panel. A total of 650 Canadian business owners (400 small, 250 larger) and 650 U.S. business owners (400 small, 250 larger) were surveyed.

News source: BMO Financial Group


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