PLANNING FOR SUCCESSION PLANNING

The best time to start your succession planning is immediately,” says Dave Ryan, vice president/financial planner with PIB Financial. PIB, which is owned by Home Hardware, advises Home dealers across the country in all aspects of investment, wealth management and insurance.

The first step, Ryan says, before even thinking about succession is to make sure the structure of the business is sound, and that all its aspects are set up correctly and run smoothly.

“We often get a call where someone says, ‘We’ve got a deal on the table, can someone have a look at our business structure?’ Well, in many respects, that’s too late,” says Ryan. “Because then you can’t take advantage of some of the things that would otherwise be available to you.”

The best plan, Ryan says, is to have a very profitable and attractive business. For PIB’s part, that means asking Home Hardware dealers if they’re taking advantage of all the programs the banner offers, if their store is merchandised properly, if they’re up to date on signage and if an outsider would say the business is being run “well”, regardless of their projected timeline for retirement.

“I always say that you need to have the end in mind, even if you’re near the beginning,” says Ryan.

At Lowe’s Canada, Josée Desrosiers, the national director business development, dealers – RONA and Ace, says succession planning is something her team discusses in the early stages of a store joining the RONA or Ace networks.

Desrosiers has a detailed list of questions dealers are encouraged to ask themselves.

She suggests they start by assessing the current value of their business, then determining what strategies they can implement to increase that value over the next few years. And then, crucially, who may ultimately be interested in buying their business, whether that be a family member, employee or a fellow dealer in the Lowe’s Canada network.

Sadly, Desrosiers says, there’s no foolproof solution to that last question. But like Ryan, she agrees that if you’re asking yourself when the right time is to start planning—the answer is right away.

“There is no miracle solution for identifying a successor,” says Desrosiers. “Each situation is unique, and various succession scenarios may arise. To avoid being caught short, you need to think far in advance.”