Words Phil Doublet, Principal, Doublet Management Consulting Ltd.
At the last 5:05 Club event, I enjoyed an evening with a couple dozen Peninsula business owners. Somebody asked what I do. Simply put, I help owners plan an exit that works for them and for the business they built. Everyone in that conversation agreed this matters. Several said they had been meaning to get to it. Not one had a plan.
That is not unusual. In my experience, it is the pattern.
The Business Development Bank of Canada reported in January that 61% of Canadian small and mid-sized businesses are led by owners aged 50 or older, and nearly one in five plan to exit within five years. That is a lot of businesses looking for a new owner at once, which makes a buyer’s market for anyone who hasn’t planned ahead.
To my mind this starts with four conversations. None of them are hard; they just never seem urgent.
Your family. You may have a mental picture of one of your kids running the place. Have you asked them? I have watched owners find out, years in, that the son who stayed was only being polite and the daughter who left was the one who wanted it. Fairness is the harder half. If one child works in the business and two do not, equal and fair are not the same thing. Sort that out over dinner, not at a lawyer’s office.
Your people. The likely buyer of your business may already be on your payroll – your operations manager, your lead hand or the two who ran everything the last time you were away and managed not to phone you. Most assume they could never afford it, so they say nothing and wait to find out what happens to them. One coffee tells you whether there is anything there. That sale is slower and usually financed partly by you, but the name stays on the building.
Your number. Most owners have a figure in their head for what they need out of this. It usually arrived without much evidence, and is rarely tested against taxes, debt or what the business would actually fetch, any of which can move it a long way. Your financial advisor can work it through with you, and the answer is far more useful 10 years out than 10 months out. Hope is not a strategy.
Yourself. Is any of this written down? Does the shareholder agreement still describe the business you actually have, or is it in a binder somewhere quietly going out of date? Does your will reflect the company as it is now, or as it was when you last thought about it? Your accountant and lawyer each own a piece of this. So does an advisor you know, like and trust, who will tell you what a buyer would see rather than what you want to hear.
None of these demands a decision this year. Only a conversation, which is a much smaller thing. The businesses that get sold, passed on or kept in the family are the ones where somebody was willing to raise it out loud. Everywhere else, people stay polite until it’s too late.
One more thing, coming from 26 years of watching this. Owners consistently underestimate how long an exit takes and how hard it hits. The step that matters is deciding that this is worth your attention now, rather than that distant future point when you may be “ready.” Everything else follows, including the time to get used to the whole idea of selling.
