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Buying or Selling a Small Business?What You Need to Know

Buying or Selling a Small Business?What You Need to Know

November 2, 2016

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Today’s Panelists

HOST: Shelley Ng, Ceridian • Vice President of Product Management for small and midsize

businesses• Uses customer feedback to develop and implement new business lines• Tracks industry trends and helps customers capitalize on new

developments

MODERATOR: Stuart Ducoffe (LLB, CHRP) e2r®

• Founder of e2r Solutions and partner and co-founder of Woolgar VanWiechen Ketcheson Ducoffe LLP

• Practices employment and labour law exclusively• Certified by HRPA as a Certified Human Resources Professional (CHRP)• Worked with one of Canada’s largest and most prestigious Canadian law firms

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Today’s Panelists

Sean Foran, CIBC

• Managing Director of Business Transition Planning• Provides advice on market values for private companies, as well as the optimal

tax and legal structure for businesses in transition • Co-author of Succession Stories from the Front Line• Estate and Trust lawyer with 20+ years working with business owners

• Director & Practice Leader, Business Transition Services• Fourth generation to work in family’s firm• Expertise in business strategy, value enhancement, succession

development • 20+ years experience helping business families, private companies and

not-for-profits deal with transition

Jeff Noble, BDO Canada LLP

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Today’s Panelists

Charlotte Burke, Microsoft • Vice President for small to medium businesses • 25+ years experience leading high growth private and public technology companies• Former executive in residence with the BDC Advantage and Venture Capital Groups• Over 15 years serving as corporate director on public and private boards• Mentor at MaRS and the Next 36 helping early stage companies commercialize their

businesses

Nunzio Presta, BizON

• CEO of BizON, an online marketplace where people can buy, sell and grow businesses or franchises

• Thought leader on digital marketing and entrepreneurship through acquisition

• Mentor to many entrepreneurs

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Agenda

Trends and impact of succession planning

Urgency for planning next phase of your business

Best practices in quantifying and building the value of your business

Taxation considerations

Preparing yourself and your employees for post-sale

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Many Business Owners Fail to Plan Ahead

25%Currently have a succession plan to address the day when they are no longer able/willing to run the operation*

Succession planning remains stuck at the bottom of most

people’s agendas

Business owners are focused on actions and strategies to secure long-term

success

What is more long-term than the transition of the business?

* BDO survey

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Three Circle Model

Family

BusinessOwners

Family well-being

A cohesive ownership group with a common vision

A profitable and successful business

Insight from Sean Foran, CIBC

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Every Business WILL Transition

Plan for a voluntary transition

Inside the family / business

VOLUNTARY Lifestyle changes

Retirement

INVOLUNTARY Death / Disability

Disagreement / Divorce

Decline in profitability

Protect against an involuntary transition

Outside the family / business

Insight from Jeff Noble, BDO

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Storm clouds, failures

Good times, good returns Slow death,

memories

Time

Business

Value

All Businesses Go Through This Cycle Over Time

Insight from Jeff Noble, BDO

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Rejuvenation; new blood, new ideas, different thinking;

M&A

Time

Business Value

A New Cycle Can Begin – Timing is Critical

Storm clouds, failures

Good times, good returns

Slow death, memories

Insight from Jeff Noble, BDO

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Time

Business Value

A Revitalized, Larger, Growing Business Can Emerge

Good times, good returns

Storm clouds, failures

Rejuvenation; new blood, new ideas, different thinking; M&A

Insight from Jeff Noble, BDO

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The Trajectory

Liquidity

Relinquish Control

Management buyout

Strategic sale

Private equity (control)

Recapitalization (minority)

Debt recapitalization

Data Insight from BizON Incorporated - mybizon.com

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3 Pillars to Creating a Valuable Business for Sale

TIMING

RECURRINGSELF-SUFFICIENT

GrowthSeamless

Sustainable

Financial Reward

Data Insight from BizON Incorporated - mybizon.com

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Critical Success FactorsBuild All 3 Types Of Capital

SOCIAL Maintain the culture and enhance the legacy via a strong connection with employees, customers, family and community

• Mission, Vision, Values• Culture of Engagement• Individual/Family Reputation• Community, Philanthropy,

Environment, etc.

INTELLECTUAL Identify and mentor successors (internal & external)

• Skills/Competencies• Experience/Wisdom• Product Knowledge• Relationships/Reputation

FINANCIAL Provide for the financial independence and lifestyle of retiring and future owners

Q & A

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