Many owners, investors, and boards are looking at the Canadian succession wave the wrong way.
The headline is familiar enough: Canada is entering a historic business succession and ownership transfer wave as baby boomers pass the baton to the next generation. Here are the important numbers to consider (source BDC):
What we are seeing is a transition market, not just a retirement market. That means the winners will not be the businesses with the oldest owners or years in business. It will be operationally transferable businesses. And that is where we believe the conversation around succession planning, operational readiness, and ownership transition needs to change.
For years, Operational Due Diligence was treated mainly as an M&A and private equity discipline: validate EBITDA, test the value drivers, assess operational risks, and move fast. That logic still matters. In fact, as discussed earlier in this TPG interview, identifying a buyer’s “right to win” means looking beyond the financials to assess operational reality and the true value drivers of the business.
What has changed is the context
Today, operational due diligence is not only about helping buyers properly value an asset. It is also about helping owners, families, management teams, and investors determine whether a business can actually transition without losing value in the process.
If your business depends too heavily on the founder, runs on workarounds, lacks process discipline, or relies on outdated systems that no longer support scale, then succession becomes fragile.
While a transaction can still happen, value will erode.
In many cases, these businesses are harder to sell, harder to finance, harder to integrate, and harder to sustain post-close.
But this is also the opportunity!
When your company strengthens its operating discipline before transferring, you are not just improving operational efficiency. You are improving operational readiness, operational transferability, buyer confidence, valuation defensibility, and long-term business continuity.
Succession planning concerns are not only a private equity issue. They appear differently across industries, but the pattern remains the same.
In manufacturing, the risk of tribal knowledge (undocumented specialized experience known only to a few), inconsistent planning, weak throughput visibility, and founder-led commercial decision-making makes the operating model unstable and the ownership transition risky.
In distribution and supply chain operations, the issue is usually execution complexity. Legacy warehouse practices, reactive scheduling, poor inventory visibility, and fragmented systems can make a business look more profitable on paper than it is operationally.
In retail and consumer-facing businesses, succession risk often hides in informal roles, overloaded teams, inconsistent workflows, and decision-making structures that have evolved around people, instead of scalable processes.
In professional services and project-based businesses, the concern is often client concentration around a few relationships, unbalanced workloads and delegation, limited management depth, and outdated operational platforms that constrain scale and growth.
Across sectors, we see the same reality: if a business is not operationally ready, the transfer of ownership threatens long-term value creation.
At The Poirier Group, we have seen this repeatedly. Here are a few of our case studies as examples:
Case Study # 1:
In one engagement, a private equity firm evaluating a target acquisition engaged us for operational due diligence. We identified $7.9 million in annual EBITDA improvement potential and a 109% potential increase in revenue by examining organizational risks, logistics constraints, and operational gaps that would not have been visible from the financials alone. (see full case study)
This is the classic operational due diligence case, but it also illustrates something broader: value is created when the true operational reality is surfaced early, before ownership transition decisions are finalized.
Case Study #2
In another case, a food safety manufacturer that had grown quickly while navigating a merger, and a new ERP environment was struggling with staffing shortages, manual processes, and underdeveloped supply chain capabilities.
Our work identified $6.6 million in annual improvement opportunities and a 20% manufacturing cycle-time reduction opportunity.
In the context of business succession planning and operational readiness, this matters because operational stability directly increases transfer readiness and strategic options. ( see full case study)
Case Study #3
A leading architecture, engineering, and construction (AEC) client faced growth limitations with a 15-year-old legacy ERP system that had become a major operational constraint to growth.
Through process mapping, ERP evaluation, operational readiness assessment, and workflow optimization, the client was positioned to achieve $6–8 million in projected annual cost savings and an 8% productivity increase.
That is not simply a technology modernization story. It is an ownership-readiness story. Legacy systems are often invisible succession risks that block continuity, integration, scalability and governance. (see full case study)
Case Study #4:
In a Canadian discount retailer, we identified $4.3 million in recurring annualized savings and reduced manual effort by 17% through organizational alignment and process redesign. Beyond the financial impact, this type of operational excellence work is directly connected to succession readiness. (see full case study)
In many founder-led or long-tenured organizations, critical decisions, informal approvals, and operational knowledge tend to concentrate around a small group of individuals. Over time, the business learns to operate around key people instead of processes. By clarifying roles, formalizing decision rights, redesigning workflows, and institutionalizing operational knowledge, organizations can reduce founder dependency and improve operational continuity. In a transition scenario, stability becomes critical because buyers, successors, and employees all need confidence that the organization can continue to perform consistently after leadership changes.
Instead of starting succession planning with tax structure, legal mechanics, or valuation analysis – which are essential – answer a fundamental operational question first:
What exactly are we handing over?
Here is the high-level path we recommend to answer that objectively.
Look beyond EBITDA.
Assess founder dependence, leadership depth, management bench strength, process maturity, systems readiness, customer continuity risks, and operational resilience.
The old “right to win” logic still applies.
Identify the 2–3 operational levers that will most influence valuation, resilience, and post-transition momentum? Then assess the organization’s ability to improve those value drivers before ownership transition.
In Summary: Operational Readiness Drives Succession Success
We do not believe the next decade will be defined by a shortage of buyers alone. It will be defined by a shortage of businesses that are ready to be handed over successfully.
Operational Due Diligence is no longer just a pre-deal checklist. It has become a strategic imperative that helps organizations identify current stateoperational risks, value creation opportunities, and transition barriers before ownership changes occur.
It helps protect legacy, brand and customer loyalty while capitalizing on added value from actionable operational improvements.
Ownership changes can destroy a legacy breaking what took years or decades to achieve.
If you are an owner, this is not about preparing to leave, it is about preparing your business to successfully operate, scale, and create value without you.
No. Those elements are critical, but they do not solve operational fragility. A business with weak processes, overdependence on the owner/founder and/or outdated systems will still struggle to transition, even with excellent legal and tax structuring.
Not at all. In many ways, smaller businesses are more exposed because they are often more owner-dependent and less formally structured. That is one reason the low rate of formal succession planning in Canada is so concerning.
Earlier than most people think. If exit is even a medium-term (2-3 yrs) possibility, operational readiness work should begin now. It takes time to institutionalize improved processes, strengthen leadership capabilities, and reduce dependency on a few key people.
They assume a good business is automatically transferable. It is not. A profitable company can still be difficult to sell, difficult to integrate, or difficult to sustain if the operating model is not ready for transition.
