Working as an employee in a family business that your dad owns (Part 3)

Working as an employee in a family business that your dad owns (Part 3)

By Christian Alary / Unison Workplace Strategies

We are currently entering year six of our succession plan.

 

I don’t think I mentioned this in my previous blog, however, yes, this is the 6th year. In my first 4 years, the focus was mainly to gain experience. Year 1 was spent here with Unison Workplace Strategies and year two, three and four were spent with a manufacturing company to better understand different works environments. And last year, year 5, the main objective was for me to gain experience here with Unison and to communicate my vision of the business to Marc-André. We have a plan and are actively working on it, and fortunately, there are a few things happening that I can share in this and future blogs.

 

With the goal of learning about the succession process and networking, I attended a luncheon presentation organized by the Greater Moncton Chamber of Commerce: Business Succession 101 What’s Your Exit Strategy? The information shared was surface-level, which is understandable since you can only share so much in one hour. Even though the luncheon was mainly focused on the seller, and I was familiar with most of the information shared, it confirms that we are on the right path. A lot of the “experienced” entrepreneurs (this is the word I use so I don’t have to call them old) will be exiting the workforce and this will most likely be a trend for the next decade or so. These are not the exact statistics presented by Steve Bragg from MC Advisory during the luncheon, but they are close enough:

 

  • 60% of Canadian small and medium business owners are aged 50 or older
  • 70% of private company are planning to sell or pass on their business in the next few years
  • 51% of these owners have no exit strategy

 

I’ve mentioned this before in a previous blog, if you are taking the time to plan your exit you are already doing better than most owners in the same position. I should mention that we are also helping clients structure their business operations for their upcoming exit or to simply allow the owner to gradually slow down. One of the most unattractive characteristics of small and medium-sized businesses is being overly dependent on the owner, which is the reality for most SMEs including Unison Workplace Strategies.

 

Between Marc-André and I, we’re currently working out the details of our transaction, there is nothing set in stone; however, it will most likely look something like the following: Marc-André will finance me the first 50% of the business. I will end up with ordinary shares, technically giving me the right of the vote, which doesn’t make a big difference in our situation. For the remaining 50% of Unison, I will be purchasing the shares progressively starting in 5 to 6 years or so. This will allow me to generate wealth on the front end of the deal and make it possible for me buy out Marc-André without having him finance the last 50%.

 

I really want to share more details with you but unfortunately for now I can’t. If you think I or someone else can benefit from your knowledge on this topic, please do not hesitate to reach out.

 

Thank you.