Are small businesses in the Okanagan in jeopardy?
KELOWNA – The City of Kelowna projects a bright future for local business owners, but one Okanagan man, who specializes in commercial company sales, is predicting something different. The CEO of Business Finders Canada, Steve Harvey, says many Okanagan owners are struggling to sell their companies, sometimes being forced to close instead. He says one reason is a failure to properly plan for the sale of a business.
“It’s never too early to start planning to prepare your business for sale. You know, the most successful people that we work with that have looked even 10 years out for the sale of their business,” says Harvey.
Adding to the pressure are retiring baby boomers and the sheer numbers of businesses that are predicted to be up for sale at the same time.
“At any typical time approximately 20 per cent of [Canadian] businesses are up for sale in the marketplace and that has jumped up to, and is continuing to jump up to, about 42 per cent and over the next 10 years, 70 per cent,” explains Harvey.
Okanagan entrepreneur Campbell Stewart successfully sold his businesses in North Western B.C. before buying a local pub. His biggest piece of advice for Okanagan business owners looking to sell is to start planning your exit early.
“I would just say start thinking about it way in advance because often the process could linger on and on,” says Stewart. “I think when you really want out, you’re at the mercy of the purchaser, desperation can really colour a deal.”
Harvey says 80 per cent of Canadian business owners fail when they try to sell their company. He says here in the Okanagan last year, only 16 per cent of businesses that were listed actually sold.
Harvey adds many of those unsold companies end up closing. Kelowna’s mayor says the city can play a role in helping to attract the next generation of business owners.
“Things we as a city can do to help facilitate this is by making this a place that young people want to come live and grow and family and grow roots in,” says Colin Basran.
A CIBC report on retiring Canadian business owners says about 30 percent of small or medium company owners will be selling or transferring ownership in the next five years.