Many Quebec entrepreneurs will sell in the coming years the business that they spent a lifetime building because they do not have successors willing to take charge of day-to-day operations. To mitigate the risk of many of our great SMEs passing into foreign hands, family businesses must learn to keep control of shareholders while delegating management.
Three weeks ago, I wrote a column on an initiative by the Beauce School of Entrepreneurship aimed at accelerated training of 1,000 business buyers and sellers over the next five years.
The aim was to launch a blitz and raise awareness among the Quebec business community of the fact that some 34,000 companies will change hands over the next 10 years due to the retirement of their founder or operator.
It was during this visit to Beauce that I met Martin Rancourt, an entrepreneur from Saint-Georges, who experienced the premature sale of his business and the regrets that this caused.
I wanted to retire at 50. It was cool to say that you stop everything at 50. After a year and a half, I bought a business and I want it to remain part of the family heritage.
Martin Rancourt, owner of Location de Beauce
Owner of a marketing firm and co-shareholder of Maximetal, a large manufacturer of fire engines, he sold his two stakes within a few months of each other.
“It’s beautiful at first. You buy a sugar bush, you make stock market investments, you do a little real estate because everyone tells you to do it, you join Anges Québec, but at the end of the day, you are as busy as before, but in eight different patents,” he summarizes.
This is how he decided to buy Location de Beauce de Saint-Georges, a tool rental company where he opened a second branch in Lévis. Martin Rancourt convinced his son to join him in the ownership of Location de Beauce, not as an operator, but as a simple shareholder-owner.
“In Europe, a business like ours passes from generation to generation. Why sell and scatter? My son is an engineer at Manac, he doesn’t want to operate the rental center, but it will one day be his property and that of his children who will not have to operate it either, that’s how we can sustain our businesses,” explains Martin Rancourt, who is also a coach-trainer at the EEB.
An industrial example
Still in Beauce, in Sainte-Justine, the Cayouette family, which is preparing the transfer of its Rotobec company to a third generation of the family, has also learned that one can remain a controlling shareholder in a company without necessarily having to be a shareholder. the chief manager.
Marcel Cayouette founded the Rotobec company in his general mechanics garage in 1975, which manufactures heavy handling equipment, including a revolutionary industrial grapple.
The company now has 500 employees in three factories, including two in New Hampshire. The company exports its products to 50 countries.
As early as 1988, Marcel Cayouette understood that he needed a team to surround him and he shared shares with five leading collaborators. He later appointed a general manager, Robert Bouchard, who became CEO and who remained in office even though his three children, Sylvain, Richard and Benoît, worked at the factory.
The three brothers, we are all retired today and we have had a new CEO since 2019, Yvon Veilleux, who has been with us for 15 years.
Sylvain Cayouette, from Rotobec
He became a shareholder of Rotobec and he is the representative of the 2.5 generation, he is the one who is preparing the 3e generation,” explains Sylvain Cayouette, whose three daughters work for the company.
“We have five of our children who are at Rotobec and two who are still studying. We remain shareholders, but we will transfer our shares to our children in a few years. We are not going to sell to them, we want the company to continue its development and we are counting on the management in place for the future. »
According to Martin Rancourt, there is a way to keep the ownership of many family businesses in Quebec if we accept that the family shareholder(s) are not necessarily the operators.
“If my son’s kids want to study music, they’ll just have to do it. We just need to teach them to read and understand a financial statement and to organize a board of directors, they do not have to manage operations on a daily basis,” he argues.
The unpredictability of stock markets and the high concentration of capital in the technology sector have revived the interest of large financial groups around the world in beautiful private companies that are well managed and which still have good return potential. .
Last week, the private investment division of Goldman Sachs bank announced that it intends to increase the value of the portfolio of its private holdings from 130 billion to 300 billion over the next five years. The sharks are hungry and there are plenty of small fish that could be too easily swallowed.