A successful business is one that is able to transition and move with the ebbs and flows of the economic landscape – and a big part of that has to do with times of transition in the company.
There are many shapes and forms of business transitions, from a direct seller-buyer transaction to family succession.
But it’s not always clear to business owners how to go about making these sorts of transitions.
A recent survey by Business Development Bank of Canada found that four out of 10 small and mid-sized business owners in British Columbia plan to exit in the next five years, but many are not prepared for the transition.
Karen Flavelle, chief connoisseur at R.C. Purdy’s Chocolates in Vancouver, knows the challenges of business succession within family first-hand after taking over the company from her father.
Growing up, neither Flavelle nor her three siblings initially planned to go into the chocolate business like their father.
“As we grew up, my father was not encouraging about us coming into the business,” says Flavelle.
“The message at the dining room table was that he didn’t want to parachute his kids in over long-term employees.”
That meant Flavelle and her siblings ended up following their own paths at the beginning of their careers.
For Flavelle, that led her to do everything from working for General Mills to living internationally in Europe.
Working elsewhere for a dozen years before coming into her father’s business proved to be extremely helpful, Flavelle says, and is something she encourages others to do.
“It made me a lot more confident in what my abilities are,” says Flavelle.
When she eventually decided to move back to Canada, she started looking at job opportunities and thought about joining her father at Purdy’s.
“He said, ‘No, there’s nothing for you at Purdy’s.’ He was fully staffed and wasn’t thinking about the future at all.”
But a series of life events, such as losing a family member in a mountain accident, which brought home the reality of mortality, and a partner at Purdy’s bringing up the topic of transitioning the company to family, eventually convinced her father that Flavelle was the right person to take over.
“There were a couple of times where there was a bit of friction. When someone comes into a leadership role, you need to instil confidence.”
For Flavelle and her father, the process of transitioning leadership took about six years to complete – something Flavelle says is important to keep in mind.
“Through that six-year period, Dad and I were negotiating what it would look like when I came in.”
Going slowly and communicating clearly are two of Flavelle’s key pieces of advice for other companies transitioning.
Flavelle’s story is just one of many experiences about transition and company exit strategies at the upcoming Business Transitions Forum, Canada’s largest event catering specifically to the issue.
“This event is a great place for any business owner to go if they are thinking about, in some cases, retirement, or if they are thinking about possibly selling their business or adding value to their business,” says David Tyldesley, co-founder of the forum.
Not only does it give business owners the chance to hear and share stories, but it’s also a way to network and engage with others grappling with similar challenges across industries.
“We try to give a 360-degree view of all the different moving parts that are involved in a transition of business ownership,” says Tyldesley.
Tracey McVicar, a managing partner at CAI Capital Partners, emphasizes the various elements business owners need to keep in mind when transitioning.
“It’s not only about selling the business but transitioning your leadership,” says McVicar.
“There is so much psychology and emotion that goes into these kinds of transitions, whether money changes hands or not.”
To register to attend the forum, visit businesstransitionsforum.com/vancouver. Early-bird tickets are on sale until October 19.