In April, to mark the launch of the First Nations Business Transfer Service (FNBTS), we decided to present a few articles on the theme of business transfers and acquisitions. In this first article, we are presenting the structure of this new service that is offered free-of-charge by the FNQLEDC.
In a context of lack of succession among Quebec businesses, business transfers offer an interesting opportunity for First Nations. While the average age of business managers has just exceeded 50 and about 15,000 enterprises are looking for successors1, First Nations are positioning themselves as key business partners. Indeed, the First Nations population is on average 6 years younger than the non-Indigenous population2.
Despite this economic situation, business transfers are not a well-known economic development model among First Nations. The First Nations’ vision of economic development mainly involves the launch of new businesses. And yet, there are good models of communities taking ownership positions in many businesses in their respective regions while conducting strategic upgrades within them for the benefit of businesses, employees, and community members. For example, the Innu community of Essipit has become a major player in the socio-economic development of the Haute-Côte-Nord region with this model as a lever for economic development. The Essipit example will be appearing in another article as part of our thematic series on business transfers.
The business transfer option can help mitigate certain risks associated with the creation of a new entity considering the already existing background and foundations. Being well positioned in rural areas where the greatest proportion of transfer intentions are located3, we believe this new service has great potential to contribute to the economic development of the Indigenous communities.
Service Components
The FNBTS was developed in partnership with the Centre de transfert d’entreprise du Québec (CTEQ) with a focus on raising awareness and training communities’ economic development officers and entrepreneurs, but also with the aim of supporting them in their business transfer projects. In addition, an Indigenous Acquisition Support Program (IASP) has been developed to facilitate access to specialized professionals.
For the first segment of the service, awareness workshops will be offered to communities, but also to non-Indigenous business managers. We believe that this knowledge of business opportunities available with First Nations will benefit the ongoing reconciliation progress by facilitating networking between non-Indigenous business sellers and Indigenous acquirers. Training will be jointly provided to the various players in the ecosystem in order to develop their business transfer knowledge.
The second part of the service consists of customized support offered to Indigenous business sellers and acquirers at all stages of their business transfer projects. This component also covers, if necessary, the development of necessary skills for the acquisition of targeted businesses.
The Indigenous Acquisition Support Program
Through the support offered to Indigenous business acquirers and sellers, the IASP aims to support the targeting and selection of appropriate professionals with respect to the needs of the business transfer under analysis. The goal is to promote accessibility to specialized services necessary to complete the acquisition or sale of a business. The FNQLEDC offers to pay up to 75% of the professional fees related to the transaction, for a maximum financial assistance of $30,000 per project. The components and particularities of the program are defined on our website at cdepnql.org.
The accessibility of professionals is often a barrier to undertaking the analysis of a potential acquisition. This program will be useful to stakeholders wishing to ensure the appeal of a transaction. In addition, a newcomer may have difficulty understanding what professional expertise is necessary or desirable in the context of a business transfer. The program will therefore support the parties in analyzing needs and choosing professionals.
The Stages of a Business Transfer
The support offered covers all stages of business transfer projects. Although a transaction is rarely conducted in a linear fashion, here are the main steps:
We will provide greater details of these different stages as well as the support that the FNQLEDC can offer at each stage in an upcoming article from our thematic series on business transfers and acquisitions.
To learn more about business transfer, we invite you to contact our Business Transfer Advisor, Antoine Grenier, at [email protected] or by phone at 418-843-1488, extension 1236.
References
- https://ctequebec.com/blogue/relance-economique-du-quebec-grace-au-repreneuriat/#:~:text=Ainsi%2C%20au%20cours%20de%202020,situant%20maintenant%20%C3
%A0%2050%20ans.&text=Un%20chef%20d’entreprise%20sur,de%20plus%20de%2060%20ans (French only) - https://www12.statcan.gc.ca/census-recensement/2016/as-sa/fogs-spg/Facts-pr-eng.cfm?LANG=Eng&GK=PR&GC=24&TOPIC=9
- https://ctequebec.com/wp-content/uploads/2019/05/CTEQ-Sommet-2019-Final.pdf (French only)
