ESTERHAZY — Is your business ready for the next step?
It’s a simple question, yet one that many business owners feel uncomfortable looking at, let alone answering. The Esterhazy Economic Development Committee hopes to help business owners prepare for succession with a special half-day workshop on Feb. 12 at the SN Boreen Community Centre, featuring the expertise of Cindy Reid from Ready for Next.
“There are about 16 per cent of SME (small and medium-sized enterprise) owners that have any kind of formal succession plan, meaning they’ve actually not only thought about it, but they’ve taken the steps to actually put plans together that are written down, not just in the ether,” Reid said. “Although there’s at least 35 to 55 per cent of them that plan on selling or transitioning within the next five years, and they’ve done nothing to prepare for it.”
An even more staggering statistic is that more than half of businesses don’t have a say in their transition.
“Fifty-five per cent of transitions out of a business are involuntary,” Reid said. “I think that’s one of the statistics that is glaringly scary for not just our industry, but our economy at large because it’s really difficult to transition a business, and I think that’s why a lot of people don’t do it. They just don’t know where to start. They don’t know what they don’t know, but the reality is that you can either attempt to take control of the process, or the process will just happen without you, because 55 per cent of them happen whether you want them to or not.”
The ability to successfully transition a business through generations also does not boast favourable numbers.
“For those family business owners that actually do the planning work, only 30 per cent of them actually successfully transition to the second generation,” explained Reid. “The statistics get abysmally worse from that point forward. Only 12 per cent make it to the third generation, and we’re hovering in and around the three to four per cent for those that pass on to the fourth generation.”
Reid also pointed to SMEs in Saskatchewan relying heavily on regional markets, which exposes them to the vulnerability of external shocks. She also shared the fact that our province has a high level of entrepreneurial spirit, leading the nation in that regard.
“Actually, Saskatchewan has the highest number of businesses per 1,000 adults across Canada,” she said. “A great many of them are sole proprietorships or small partnerships with limited scalability, but you’re still a very entrepreneurial province. I imagine that a lot of that has to do with the ag industry.”
Workshop provides the tools
Given those statistics on business succession, the upcoming workshop in Esterhazy provides a beacon. Reid will draw from her experience in not only strategic planning, but from working with businesses that have successfully embarked on their own transition process.
There are a few topics that Reid will focus on throughout the workshop, including the fundamentals of building a valuable business, the impact of risk on business, and understanding transition options. Realizing that one doesn’t gain enough knowledge in a four-hour workshop equal to a business degree, there are also some powerful tools available to attendees to access online.
“We think that it’s more sustainable when you have more the high-level conversations on a macro level, but introduce enough of the topics that help spark or resonate with the audience,” Reid said.
The Hub will give business owners access to an online portal they can refer to in their own time, including actionable items participants can implement as they continue their educational journey and planning process.
“The Hub will be accessible to all the attendees for the year, which also gives them an opportunity to create conversations with us so that if they have follow-up questions, or if they want to dig in further to things that we talked about in that limited time, there will be a lot more granularity in the Hub, a lot more information, topics, tools, research,” Reid said. “We’ve got micro learnings, we’ve got all sorts of supportive assets in there that they’ll be able to access and continue to learn from or grow from.”
Reid says she has a strong passion for assisting SMEs and seeing business owners succeed.
“I love education, and I love taking really big, complex problems and making them something that people can actually see their way through,” she said when asked what drives her to share her expertise. “Simplifying it, breaking it down in actionable steps, and seeing people on the other side—whether it’s the adviser not understanding a complex problem that they need to solve for a client, or the actual client and business owner themselves having a complex problem that they can’t see their way through—and they’re shown. I am supercharged by the opportunity to make life better and easier for them.”
The Succession Readiness Workshop runs from 10 am to 2 pm on Feb. 12 at the SN Boreen Community Centre in Esterhazy. For more information, or to register for the workshop, contact [email protected] or call (306) 745-3942.
