Because less than half of shoppers know what they’re having for dinner tonight, Montreal management consultant Michel Grenier of 6nergie predicts most of those entrepreneurs haven’t begun thinking about how they’ll transfer their business to the next generation, or to new owners.
Speaking at the Quebec Produce Marketing Association’s annual convention Aug. 16-18 in Gatineau, Grenier said 70% of Quebec companies don’t survive their founder.
“That’s a great loss of business capacity,” said Grenier, who also directs the entrepreneurship centre at the University of Quebec in Montreal.
Business ownership is dropping in Quebec, he said, as young people choose not to work 80 hours a week, or don’t share their parents’ love of the land.
Transferring a business takes at least three to five years of preparation, he said, while concluding a transaction can take six to 18 months.
“Companies can’t be sold like a house, with a fresh coat of paint,” he said. “Just as you put your house in order, you must put your business in order.”
Only 38 QPMA members responded to a survey sent to business owners in July, asking if they’ve created a succession plan to ensure the future of their own company.
Without the right plan, employee jobs are at risk, along with perhaps years spent building relationships with partners, suppliers and customers.
He suggests business owners start thinking now about how they’ll bow out of their business, and gave some questions to consider:
- How long do you think you can or want to continue running your business?
- Will you sell, transfer it to a manager or hand it to a family member?
- Does the person you’ve selected know? Does your staff know?
- Do you have an emergency plan in place and a “relief pitcher” in case something happens to you?
- If you plan to pass on your business to a family member, start now.
“You have to develop future generations,” he said. “You can’t wait until the month or week before retirement.”
If you’re not ready to think about succession now, pick a year to start your planning, he said.
As retirement nears, it’s time to bring in a coach or mentor to help fine-tune your plan, and seek out financial and legal specialists.