BUSINESS FINDERS CANADA BLOG

Why do business in the Okanagan?

7 reasons the Okanagan is a great place for business

We’ve said it before and we’ll say it again: The Okanagan is a great place to do business.

The beautiful valley nestled in southern B.C. boasts wineries, ski hills, lakes and rolling vistas. It attracts skilled workers and tourists who have money to spend.

There is a major university, an international airport and restaurants to satisfy any foodie.

Business Finders Canada is based in Kelowna and we work with lots of people who want to relocate here.

Here are our top seven reasons to do business in the Okanagan Valley.

1. People. The Okanagan is a tourism hub. The Kelowna International airport has been experiencing record growth year over year – often month over month. Tourists mean business opportunity. They visit hotels, restaurants, bars, gas stations and stores. They buy clothes, toiletries, souvenirs and experiences.

2. Lifestyle. Who doesn’t want to live in a four-season playground? Okanagan lifestyle includes skiing, snowshoeing, boating, fishing, exploring. Our summer is hot and sunny. Our winter is mild and filled with activity.

3. Economy. When it comes to entrepreneurs, the Okanagan reigns. Business licences have increased and unemployment is low. People here are working in a region with strong tech, tourism, medical and housing sectors. Commercial real estate is humming along. There are opportunities to buy and opportunities to sell.

4. Health care. Wherever you are in the Okanagan, you’re close to top tier medical care. With three major hospitals and the Interior Heart and Surgical Centre, the region is home to top doctors and surgeons. It also has a thriving service industry that includes clinics, medical equipment suppliers and technical support.

5. Culture. From marathons to concerts, festivals to sporting events, there are near-endless opportunities for sponsorships and volunteer involvement. Being active in the community is a great way to network, promote and enhance your lifestyle.

6. Resources. The Okanagan has strong advocacy for business. Chambers of commerce are active throughout the region. The Okanagan Economic Development Commission keeps track of key indicators and young business people have their own collectives.

7. Workforce. The Okanagan has a diverse workforce, ranging from skilled labour to summer students to contractors in every industry. The sunny Okanagan is constantly drawing smart, skilled dedicated people. We have a deep well of talent.

This isn’t to say there are a lot of other great places to do business. We help people buy and sell all over Western Canada. Kelowna is where Business Finders Canada was founded, and we love living here!

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Thinking ahead makes you money

People often ask us: When is the best time to sell?

The obvious answer is when your business is worth the most.

But it’s more nuanced than that. It’s time to sell when you’re ready. Or when you’ve lost interest. Or when a solid buyer comes along. Or when outside interest in your business appears to be hitting a significant peak. Or, or and or…

No matter what the answer is for you, selling your business is something that should be on your mind from the very start.

When people ask us when they should get ready to sell, we’re only half joking when we say ‘yesterday!’

Decisions you make early on will likely affect the sale price and your ability to sell.

As your business grows, it’s important that you put into place systems that are able to independently run when you’re not at the helm. As we’ve discussed, that’s part of a strong exit strategy. (It’s also a way to make sure you can take a proper vacation!)

Now is a great time to get your business working for you – rather than the other way around.

We’re living in the digital revolution. Top business experts at the Business Development Bank of Canada say the new industrial revolution affords businesses great opportunity. Digital advances can be used to create systems that help with accounting, field reports from staff and tracking warehouse inventory.

Those kinds of innovations can help cut costs and – just as importantly – create systems that make transitioning a business easier on the buyer.

That’s the kind of thinking that will increase the sale value of your business when you’ve decided it’s time to sell.

Having systems in place early will also mean you’re able to sell on a dime, so to speak.

You may not be thinking about selling now. In fact, you may be fully occupied with how you’re going to grow into the number 1 player in your market.

Certainly, we get into business to make a profit every day, every week, every month, and every year. However, we also build our own business to sell it someday.

Never lose sight of the end game.

Business Broker Profile: Andrew Pohl

We want you to get to know us, as we get to know you. 

Our professional business brokers help Business Finders Canada stand out from the crowd.

To highlight our team, we’re featuring each of our brokers in a Q&A.

Meet Andrew Pohl:

How would you describe what a business broker does?

We serve as a hybrid between a matchmaker and a Sherpa. Beyond making the appropriate connections between buyers and sellers, we provide assistance in navigating the often complex process of transitioning a business between owners.

What’s been your favourite experience in the industry?

I really enjoy following up with former buyers and finding out that they’re pleased beyond measure with their purchase. Beyond providing a living, a business purchase can change the trajectory of the lives of entire families, and it’s a lot of fun to see exactly that happen!

Who inspires you?

The brave entrepreneurial individuals who often take the path of most resistance, and work tirelessly to pursue their dreams of being their own boss, and doing something that they truly love.

What’s a defining moment in your life?

Getting married. My wife and I just celebrated our 10th anniversary, and it makes me realize what a joy it is to be part of a loving and symbiotic partnership.

What’s an important piece of advice you give to business owners?

Be prepared to work exceptionally hard (especially in the beginning), surround yourself with good people, and don’t be afraid to ask for help when you need it.

Do you have a favourite quote?

“In the business world, the rearview mirror is always clearer than the windshield.”
~ Warren Buffet

What’s the best way for people to connect with you?

Email (andrew@businessfinderscanada.com) is usually best when confidentiality is concerned, otherwise Facebook and Twitter work just fine.

Business Broker Profile: Nelson Bayford

We want you to get to know us, as we get to know you.

Our professional business brokers help Business Finders Canada stand out from the crowd.

To highlight our team, we’re featuring each of our brokers in a Q&A.

Meet Nelson Bayford:

How would you describe what a business broker does? 

A business broker guides the sellers through a process of establishing a “fair market value” for the business; connecting the business for sale to qualified buyers in a confidential manner; and facilitating a successful transaction between seller and buyer.

What’s been your favorite experience in the industry?

My favourite experience is having control over my income and time, allowing me to establish a good balance between work and personal life.

Who inspires you?

My grandchildren

What’s a defining moment in your life?

On August 31, 1971, I attended a Concept Therapy course, where I first recognized that “I become what I think about all day long” and that I have full control and choice over what thoughts I think.

What’s an important piece of advice you give to business owners?

Anticipate and prepare for the sale of your business with the thought in mind that the true value of your business is based on the profitability and the ROI for the buyer.

Do you have a favourite quote?

“Nothing should be prized more highly than the value of each day”

~ Goethe

What’s the best way for people to connect with you?

Telepathically? Ha! Ok then, by email.

Also find Nelson Bayford on FacebookTwitter and LinkedIn.

Business broker profile: John-Erik Grain

We want you to get to know us, as we get to know you.

Our professional business brokers help Business Finders Canada stand out from the crowd.

To highlight our team, we’re featuring each of our brokers in a Q&A.

Meet John-Erik Grain:

How would you describe what you do?

As a business broker, I guide buyers and sellers through the entire business transaction process. We co-ordinate everything from the business preparation phase, determining accurate business value, sourcing suitable buyers, negotiating terms and conditions, liaising with lawyers, accountants, landlords, and other consultants, ensuring deals close on time – all while maintaining the highest level of confidentiality.

Educating buyers and sellers is of utmost importance through the process so we are all on the same page and everyone knows what to expect each step of the way.

What’s been your favourite experience in the industry?

The buzz-feeling I get after a transaction closes is my favourite experience.

I know that all the work and after-hours time that we put into the deal is now allowing and inspiring the sellers to move on with the next chapter of their lives. It may include gassing up ‘the Winnie’ for trip down south or starting up another venture. Either way, we have helped people better their lives.

Who inspires you?

My grandmother. She has been to hell and back and she is still full of life and laughter at 96 years old. She and her family were chased out of Norway during the war, losing family members along the way. She ended up on Salt Spring Island with nothing, and she will still put a smile on your face with her contagious laugh, candid advice, and crushing hugs.

What’s a defining moment in your life?

Mangling my knee in an accident when I was young changed the course of my life and set me on a path of determination to overcome the odds. I still follow this path.

What’s an important piece of advice you give to business owners?

Be prepared for compromise during sale negotiations. There are several ways to sell a business. The buyer and the seller must work together so they each maximize the benefit and value.

Do you have a favourite quote?

“Do or do not, there is no try.” ~ Yoda

Is there a current listing you’d like to highlight?

I meet a lot of people who want to come to the Okanagan for the lifestyle. A perfect business for a budding entrepreneur in the Okanagan is a well-established cellphone retailer. It has a great reputation, located in a perfect location and seller financing is available. This is a perfect chance to become your own boss in one of the country’s most livable cities!

What’s the best way for people to connect with you?

Meeting up for a coffee and a chat after a phone call – 778-581-3456.

Find John-Erik on Facebook, Twitter and LinkedIn.

Never too early for an exit strategy

It’s never too early to plan your exit.

Starting with the end in mind is good strategy in chess – and in business.

For business owners, successful exit hinges on succession. But let’s put into perspective how uncommon it is to celebrate a graceful departure: About 80 per cent of the businesses on the market will not sell.

The most common reason is owners don’t realize the need to properly plan for the sale of their business.

Statistics Canada found many business owners are at the age where thoughts of retirement start to germinate. Those between the age of 50 and 64 make up about 50 per cent of those who own small and medium-sized businesses.

However, a survey by PwC Canada found only 18 per cent of Canadian family businesses have developed a comprehensive succession plan that has been both documented and communicated. That’s less than one-fifth.

Let’s look at the key considerations for an exit strategy.

Consider your options. Identifying how you’ll make your exit is a good first step that can have an impact on your preparations. Will you pass your business on to a successor? Will you transfer ownership through a management or employee buyout? Will you sell the business to a third-party?

Create a guidebook. It may sound like common sense, but to transition out of a business, it has to be able to operate without you. A business is much more desirable to a buyer when there are clear operating procedures. Develop an operations manual that outlines key procedures – day to day and month to month.

Get your house in order. You need to make sure all of your documents are up to date and well-packaged. That includes up to three years of accountant prepared financials, balance sheets and tax returns. Organize franchise or licensing agreements, employee contracts and leases.

Make an inventory. Often businesses are made up of many pieces. Know what those pieces are and what they’re worth. Some of those pieces are physical, like company vehicles, equipment, inventory and real estate. Some of those pieces are intangible, like customer lists and proprietary processes.

Turn to the experts. There are complicated issues involved in selling a business that are best handled by experts to avoid a damaging mistake – tax issues, employee rights, confidentiality and contracts to name a few. Tapping into the expertise of a professional and experienced business broker can save you a lot of grief.

Determine the value. Once you have a clear picture of your inventory and you have your documents well organized, it’s easier to determine the true value of your business. Again, turning to an expert can mean the difference between a successful sale at the right price and stagnating on the market or selling far below the true value.

Thinking through your exit strategy and taking clear steps toward succession – even when you’re more focused on growth than transition – is the best way to ensure you have a well-run and well-prepared business when it’s time to move on to your next journey.

For experienced advice, contact Business Finders Canada now at 1-888-377-8009.

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4 reasons confidentiality is key

Keeping a secret isn’t easy.

In fact, Benjamin Franklin once mused: “Three may keep a secret, if two of them are dead.”

Still, secrecy is paramount when it comes to selling a business.

Confidentiality at all times – before, during and after – is the most important factor in the successful sale of an existing business.

Here’s why:

Fear spreads like the flu. Employees may get nervous if they learn that a business is for sale, especially those in key management roles. Valuable employees may decide it’s time to start looking for a new job, leaving you shorthanded when making sure your business is running smoothly is essential.

Relationships may suffer. Sound working relations with customers, suppliers, creditors and landlords are vital. Word of a potential sale could disrupt those relationships and weaken your competitive position – dragging down the value of your company and crippling the sale.

Loose lips sink ships. That phrase was one of the most successful marketing campaigns of the Second World War. People were encouraged to avoid careless talk to help ensure enemy agents didn’t find out shipping routes or other vital information that could put people in harm’s way. The idiom applies here, too. Being flippant with information to non-vetted potential buyers could compromise trade secrets and sensitive financial information.

That’s how rumours start. Business can be cutthroat, especially in highly competitive markets. If word gets out that you’re selling, competitors may use that information to attack your reputation, spread negative stories and steal your customers. Your competitors may also start to market more aggressively to take advantage of the sale.

How do you keep the sale confidential?

Hiring a professional business broker is an important first step to protecting confidentiality. If you want to sell your business yourself, confidentiality is lost.

Business Finders Canada has all potential buyers sign a non-disclosure agreement.

We do not disclose information without your permission. In most cases, we don’t list publicly on MLS for everyone to find.

Instead, we keep a confidential directory of qualified buyers who are actively looking for a business to purchase.

With the proper procedures, it is possible to minimize the risk of an untimely disclosure.

For experienced advice, contact Business Finders Canada now at 1-888-377-8009.

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Proposed tax changes bad for business

The tax changes proposed by the federal Liberals are a slap in the face to small business owners.

Federal Finance Minister Bill Morneau’s office is preparing to launch the most radical tax overhaul in 50 years. It’s already causing a lot of anxiety among Canadians.

In fact, dozens of organizations from across the country have banded together to form the Coalition for Small Business Tax Fairness — a unified voice to oppose the proposals.

Morneau plans to add a new tax on investment income in a corporation, along with tough new rules for compensation within a family business. The changes come at a time when businesses are already being bombarded by unsustainable increases to minimum wages, rising electrical power costs in North America, cap and trade or carbon taxes, increases to CPP and EI premiums, and the serious trepidation attached to the NAFTA renegotiations.

The Trudeau government is justifying the tax changes by saying they’re about making the rich pay their fair share of taxes. However, these changes go way beyond that – injuring the middle class. The new rules would impact all business owners across the spectrum.

These changes are a business killer. Here’s why:

Starting after 2017, capital gains realized by a family member would no longer be sheltered with the lifetime capital gains exemption to the extent those gains accrued while the individual was a minor. Further, any capital gains accrued while the shares are held in a family trust, or gains subject to the tax on split income would not be eligible for shelter using the lifetime capital gains exemption.

The proposal would restrict business owners from spreading income to family members in lower tax brackets, limit the use of private corporations to make passive investments, and limit the ability for a corporation to convert regular income into capital gains.

While it’s complicated, overall the proposed changes will have a major impact on family succession planning, exit strategies and the flow of passive income. All bad news for small business owners.

Most small business owners take on a ton of risk, go into debt or leverage their house, usually don’t pay themselves much when first starting out, and work extremely long hours in the hopes of making a go of the business. They hire people, pay rent or buy property, pay for advertising and salespeople, invest in inventory, pay tax as they go and operate under an ever-increasing set of government rules and guidelines.

So much for the reward of starting and running a small business. We should be encouraging entrepreneurs, not discouraging them.

If anything, business owners need a break.

Get angry and get in touch with your local MP to make it known that these changes are unacceptable to business owners in Canada. As Canadians, we don’t need – or want – additional or higher taxes.

What can you do?

Get in the know – You can view the announcement made by Canada’s Department of Finance, or to better understand the impact of the proposed changes on business, read this recent article in the Globe and Mail.

Take action – If you feel strongly enough about the proposed changes we would encourage you to write your local MP so he is aware of your concerns. You can also submit a response directly to the Finance Minister.

What kind of business should I buy?

Buying a business is one of the most important decisions you’ll ever make – and one not to be rushed into.

There are a number of options open to you.

It’s important you do your research to make sure you’re buying the right type of business for you and that you pay the right price for it. A professional business broker is a great resource to help throughout the process.

Buying an existing business may be better for you than starting from scratch. The main reasons are it can take you twice as long and it can cost twice as much to start a band new business.

Some of the benefits of buying an existing business include:

• Immediate sales – As soon as the deal closes, you could be generating income from the first day, if customers are invoiced.

• Easier to get credit – Banks are more comfortable lending to existing businesses.

• Staff and systems – It can take many months to find and train employees and set up processes to operate a business.

Once you’ve established that buying a business is the right road for you, it’s time to decide what kind of business is right for you: a franchise or an independent business.

There are pros and cons to both.

Franchise

Generally, franchises have a proven concept. They are established businesses that have grown successful enough to require more locations. That also means they have an existing customer base that’s familiar with the brand.

Franchises often come with help for setup and training. The parent company already has things like equipment, uniforms and advertising in place, saving time and money developing your own.

On the negative side, there are rules and regulations to follow, so you won’t have total autonomy. You’ll also have to pay a percentage of the revenues to the parent company.

Independent business

With a traditional business, you’ll have much more control over rules and processes. There are no fees to pay and the revenues will stay with you.

You set the direction of the business, which means that you can be more flexible in taking advantage of opportunities that open up in the market.

However, the risk can be greater, too. The fate of the business rests entirely on your shoulders.

When it comes to deciding what type of business is best for you, it’s important to evaluate your own background and characteristics.

Ask yourself what kind of risk you’re comfortable with, what industry your skillset best lends itself to, how well you can manage people.

At Business Finders Canada, we’ve developed a proprietary buyer profile that will give you a greater chance at success. Contact us for professional and experienced help.

For experienced advice, contact Business Finders Canada now at 1-888-377-8009.

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Online: Canada Business Network

Photo: Rich Brooks/Flickr

Living in the digital revolution – Part 2

We’re living in a digital revolution.

Why not take advantage of the shift and pursue the potential cost savings and increase in profit that can come with digitization? After all, there’s no escaping the new industrial revolution, says the Business Development Bank of Canada.

Previously, we covered how the past three industrial revolutions changed the way business was done throughout the world.

Today, the message from the federal bank is clear: adopt or suffer.

“Our study indicates adopters of digital technology tend to forecast a much brighter future than non-adopters do,” says BDC. “Indeed, digital adopters in our survey were almost twice as likely as non-adopters to predict annual revenue growth of 10 per cent or more over the next three years…

“Digital transformation gives manufacturers a new lease on life.”

Accepting and adapting to changes in the marketplace adds value to your business when you decide to sell. Potential for growth is one of the things we encourage our interested buyers to look for in their investment.

The first step to capitalizing on digitization is soul searching.

Think about what your customers really want. These days, there is a big demand for products that allow people to be more efficient and enjoy their lives more fully – products that bring inherent value.

Once you have a grasp of what your customers need, think about how to harness digital technology in a way that increases the value of your business, like enhancing the delivery experience, making your products more accessible or increasing your company’s digital reach.

People are willing to pay a premium for those assets, says BDC.

Planning is the next step. Be strategic when mapping out the way technology – such as social media, cellphone apps or improvements to your systems – can make you more competitive.

Plan out long-term impacts, too. Do employees need more training? Will you have to hire more staff? What is your yearly budget for improvements?

Current employees should be empowered and well trained to embrace the changes and thrive. New employees should have the necessary digital skills or have a proven ability to adapt.

“It’s critical to find and retain talented employees, especially in the digital age. As our survey shows, access to skilled employees is the main challenge facing technology adopters.”

Expect some resistance internally. Keeping employees involved from the start and stressing why it’s important to the success of the company can limit fear and increase understanding.

At first, changes may be overwhelming, but adapting over time through small projects has been a strategy used successfully by some businesses.

“An early win on a pilot project will help demonstrate the value of digitization to you and your team,” says BDC.

“If you’ve so far made only limited investments in technology, start with a small pilot project.”

As we’ve seen from past industrial revolutions, failure to adapt can stunt growth – and in worst cases, force closure.

It’s a competitive world. If you haven’t started yet, what are you waiting for?

For experienced advice, contact Business Finders Canada now at 1-888-377-8009.

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