The ins and outs of “business successorship” was the hot topic at a lunch seminar offered by the South Cariboo Chamber of Commerce on Sept. 10.
Venture Connect business advisor Corey Sigvaldason was the guest speaker and he detailed how local business owners looking to attract buyers or investors might successfully do it.
He said Venture Connect offers a business service to help business owners and communities prepare themselves, their business and their buyers for a smooth transition.
Those who wish to sell their operations and retire usually need to plan according to the market conditions, Sigvaldason said, adding this could be two to three years or more in the South Cariboo.
He also pointed to potential negative impacts on small communities when businesses close down due to poor timing, or inadequate marketing exposure and techniques.
Many of Venture Connect’s recommended business strategies are developed based on Statistics Canada information, Sigvaldason added.
He explained due to community demographics, and aging populations in particular, Canada is headed for increasing challenges in business successorship.
“The stats show that about one-quarter of all the businesses are looking to exit within five years. The vast majority of that [88 per cent] is due to retirement.”
The Cariboo currently has the second highest distribution of seniors anywhere in the province, with 16 per cent of residents currently over age 65, estimated to reach 26 per cent by 2036, he noted.
This compares to the Peace (nine-18 per cent), Central Coast (12-22 per cent) and other regions with fewer seniors, Sigvaldason said, adding the lone ratio of seniors higher than the Cariboo’s is found in the Stikine (12-30 per cent).
He explained 34 per cent of Cariboo residents are 45-64 years of age, with less than 22 per cent between the ages of 25 and 44, as of 2011.
These local demographics can significantly hinder business successorship, Sigvaldason added.
However, the business advisor said many who plan to sell and retire are not adequately prepared beyond hiring a realtor, have no buyer in mind, or simply don’t plan to leave a business in their wake.
“Most don’t really have anyone identified … and about a third just plan on closing their businesses.
“[But], what if it is a product or service that is vital to the community?”
Sigvaldason explained some of the things communities can do include being proactive in getting foreign investors out to the community, and then really showcasing it, such as doing a familiarity tour.
“People who are coming into the country [often] don’t know the difference between Richmond, Surrey, Kelowna, 100 Mile House or Fort St. John. They’ve probably heard of Vancouver … but they don’t necessarily care.”
That business decision opens the door for investors to consider the South Cariboo, he explained, and often includes family and lifestyle considerations the community and its business sellers can pose as viable options.
Buyers look for what sort of recreation facilities, schools and recreation opportunities are available, Sigvaldason added.
“In 100 Mile, you actually have a lot of that, and can look very, very good to a lot of potential buyers. We have to position ourselves in front of them.”
More information on Venture Connect and its business marketing service is online at www.ventureconnect.ca.
