Leblanc talks exits in Herald Article
Entrepreneurs can lose millions without a proper exit strategy
Heather Laura Clarke (heatherlauraclarke@gmail.com)
Published: Feb 07 at 8:48 a.m.Updated: 16 hours ago
The Business Transitions Forum (BTF) conference returns to Halifax on April 2-3, 2020. - Contributed.
Over the next 10 years, more than 20,000 businesses will be sold or transitioned in Nova Scotia as the Baby Boomers retire, but many of these business owners are woefully unprepared for their impending exit.
Paul LeBlanc, founder and CEO of 7th Wave Capital, says that’s because most business owners spend their lives being amazing operators — focusing on their business’s profits, growth, culture — and they “don’t really want to think about what happens when it’s over.”
“There’s a bit of guilt that plays into it as well. They worry they’re forsaking their employees — who can feel like family — and they honestly don’t like to think about it,” says LeBlanc. “They avoid the topic and think ‘I’ll worry about this later, when I’m ready to sell.’ But that’s a huge mistake.”
Paul LeBlanc, founder and CEO of 7th Wave Capital, is chairing the upcoming Business Transitions Forum (BTF) conference in Halifax. - Contributed
Atlantic Canada’s second Business Transitions Forum (BTF) conference returns to Halifax on April 2-3 at the Westin Nova Scotia. LeBlanc is chairing the event because he’s seen too many entrepreneurs put their blood, sweat and tears into their business for decades, only to sell them for far less than they’re worth because they weren’t prepared.
“Entrepreneurs spend literally their whole lives creating value in an entity that they will, at some point, want to capitalize on,” says LeBlanc. “An entrepreneur’s exit is supposed to be when they collect the value for all the years of work they’ve put into their business, but many are leaving a lot of money on the table.”
Why are so many business owners hesitant to talk about the day they’ll walk off into the sunset? LeBlanc says it’s often about confidentiality.
“People who run companies are usually very private people,” says LeBlanc. “They struggle with the concept of sharing everything — their finances, customer details, contract details — with a potential buyer who might possibly be in competition with them.”
He says many business owners are also wary about rumours floating around that they’re about to sell, but the reality is that selling a business should be conceived “three years before you make the first phone call.”
That’s because the biggest problem for many business owners is that they don’t have an effective tax strategy in place — and it needs to be in place for two years before you can collect on capital gains exceptions.
Business owners also need time to ensure their balance sheet is in great shape, and transfer their knowledge, relationships, status and operations to a management team who will continue to add value after they’re gone.
LeBlanc recently had a conversation with a business owner who’s been running his very large company for 20 years and now he’s in the middle of a buy-out. Because this business owner wasn’t fully prepared, he still owns his company’s shares directly — and LeBlanc says that’s the worst possible way of exiting a business.
“Exiting your business is one of the hardest decisions you’ll make as an entrepreneur. It also has to be the most strategic.”
LeBlanc says finding counsel that’s right for you is the first critical step in the process. While the BTF conference will include sessions by bankers, advisors and mergers and acquisitions professionals, LeBlanc says there will also be panels loaded with peers from across Atlantic Canada — entrepreneurs like himself — sharing their personal stories about buying and selling businesses.
This year’s keynote speaker is John Risley, one of Canada’s best entrepreneurs. The conference will also feature more than 40 speakers, including transition experts and entrepreneurs who have gone through the process, like Mickey MacDonald, Dr. Lesley Steele, Anne Whelan, Marie Mullally, Gina McFeteridge, Dallas Mercer, Darren Nantes, Wade Dawe, Rob Normandeau, Don Mills, Dwayne Smithers, Kevin Fraser and Dave Doucette.
“You can’t underestimate the importance of getting great advice from people who have been through countless mergers and acquisitions,” says LeBlanc. “This is possibly the most crucial decision an entrepreneur will ever make in their career, but too many owners are leaving value on the table — in many cases, millions.”
He says coming to an event like the BTF conference doesn’t mean you’re looking to sell in one year, three years or even 20 years, since it’s never too early to structure your company properly with an eye on the future. But attending will be critical if you’re thinking of selling your business within the next 3-5 years.
“This is one of the most important events a business owner or prospective buyer will ever attend,” says Leblanc. “The advice you’ll get from our local entrepreneurs can make a colossal difference in the result of your exit or purchase — and our region will be better for it.”
To learn more about the Business Transitions Forum (BTF) conference or register to reserve your spot, visit businesstransitionsforum.com/atlantic. Early-bird pricing ends March 11.