Newport Partners' Survey of Canadian Entrepreneurs Offers Insights into
the Sale of a Business
TORONTO, Feb. 4 /CNW/ - In a new study of Canadian entrepreneurs,
commissioned by Newport Partners, a Toronto-based provider of capital, money
management and financial advice for successful entrepreneurs, qualitative and
quantitative research indicates that selling a business in Canada is an
emotionally draining, life altering decision that often is made without proper
planning. In a detailed survey intended to reveal insights into the behaviour,
key issues, challenges and needs of Canadian entrepreneurs from pre-sales
process through the post-sales period, entrepreneurs warn others to 'do as I
say, not as I did.'
"With experts anticipating more than a trillion dollars worth of
transactions in Canada over the next decade, the private business landscape is
changing," says David Lloyd, founding partner, Newport Partners. "With the
participation of actual business sellers, our survey results demonstrated that
although most entrepreneurs were ultimately satisfied with their decision to
sell, the process was often lonely, emotional, and conducted without proper
"By definition, entrepreneurs are often self-made, self-reliant and
independent thinkers, and the results show that they took a similar isolated
approach to the sale of their businesses."
Of the survey respondents, only a third obtained an independent valuation
or hired a broker/agent to negotiate the best deal on the sale of their
business. And less than a quarter indicated they had access to a friend,
mentor or personal advisor who had been through the experience before. "Those
who in fact did seek out the advice of a peer or trusted advisor found that
having someone 'in their corner' was invaluable. And conversely, those who
didn't, wish they had," added Lloyd.
Other significant findings show that the sale of a business for
entrepreneurs was unexpectedly emotional, leaving them with a range of
unfamiliar and often conflicting feelings. Though 80% of respondents indicated
that their choice to sell was the 'best decision' for them, 78% said it was an
emotionally draining experience and nearly half admitted to having 'mixed
emotions' for some time after the sale.
Canadian entrepreneur Greig Clark who founded College Pro Painters and
sold it in 1989 was one of the survey participants and shared this sense of
mixed emotions, noting that "while the sale was financially rewarding, in the
short term it left a huge void in my life.
"When I was building my business, it held my complete attention, and
after my stake in the business disappeared, so too went my passion, drive and
sense of direction. While I eventually used the sale to seek new challenges
and forge new opportunities, I never anticipated the sense of loss and
emotional toll the sale would take," he adds.
While the survey provided a unique glimpse into the post-sale condition,
it also clearly indicated that many entrepreneurs are unprepared for the
potential sale of their business. Less than one quarter of the business
sellers surveyed indicated that they had methodically planned two to three
years prior to the sale of their business - although almost two thirds now
would advise others to do so.
"An offer to buy can come along at any time," notes Peter
Churchill-Smith, a partner with Newport Partners. "In fact, our survey found
the number one reason entrepreneurs sold was because of an attractive offer.
Incredibly, few took proactive steps to maximize their company's sale value
before or during the process. They likely had 'a number' in mind, and when it
was reached, they sold. Many likely left money on the table.
"It's no wonder that the overwhelming message in our survey from the
participating entrepreneurs was 'do as I say, not as I did'."
The survey was commissioned by Newport Partners and conducted by the
research and analysis practice group of Capital C, one of Canada's leading
marketing agencies. A copy of the survey can be provided to interested media.
About Newport Partners
Newport Partners (www.newportpartners.ca) creates wealth and opportunity
with more than 350 of Canada's leading entrepreneurs. We provide capital and
corporate financial advice to help clients realize their goals for their
businesses, and we provide money management and financial advice to enhance
their personal wealth.
Newport Partners was started by a group of entrepreneurs and senior
financial executives in 2001.
Newport Partners carries on its business through Newport Partners LP and
its subsidiaries, and through the TSX-listed Newport Partners Income Fund
For further information:
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