With baby boomer business owners looking to bow out of the game over the next 10 years and more than $1.5 trillion in business assets expected to change hands in that time, an Island business brokerage is launching an online community to prepare small businesses for the transition.
Paratus Business Resources, which was established to help mom-and-pop stores and micro-businesses determine their worth, improve their businesses and find potential buyers, is about to launch its online PriceBuilder Community.
The community, which provides both valuation tools and resources to help owners improve their business, is a low-cost, do-it-yourself way of preparing any small business for the open market.
Paratus co-founder Morgan Tate said many small business owners don’t know where to start when it comes to determining the value of their business.
“And there’s a whole segment of business owners who are a little too small for a full-service brokerage,” he said, noting some brokerages charge a minimum of $15,000 plus legal and accounting fees to navigate a sale.
That means a business valued at no more than $100,000 is spending a lot to get any kind of return.
There are inexpensive options such as Craigslist, or massive online marketplaces such as Businessesforsale.com, which on Friday had just over 56,000 businesses listed for sale, about 2,200 of them in Canada.
But Tate said the Paratus PriceBuilder system is both affordable for any business and offers literal value for money.
Community membership costs $20 per month which provides valuation and benchmarking tools so business owners can track progress to improving on that initial valuation.
PriceBuilder allows business owners to explore areas where they can make improvements, tap into expert advice from a library of resources and ask questions of other owners who are going through the same process, Tate said.
Ideally, Tate said, owners will increase the valuation of their business until it’s market ready. At that point, Paratus offers a DealBuilder software program for $100 per month to take them through the sale process.
“This is meant to be affordable and accessible because these are microbusinesses,” Tate said.
“There are no commissions.”
The initial goal is to establish an online community of about 1,000 users, but there is massive potential Tate said.
“Companies with less than 50 employees are the vast bulk of businesses in Canada,” he said. “The market is enormous.”
In a fall 2018 report called Getting the Transition Right, the Canadian Federation of Independent Business noted 72 per cent of business owners in Canada want to quit in the next 10 years, leaving behind $1.5 trillion in business assets.
The federation noted less than half of those business owners have a transition plan and only eight per cent have a formal transition plan in place.
“This is a problem we’ve faced for 15 years,” said Keith MacKenzie, founder of Chinook Mergers, Acquisitions and Business Brokerage, the parent company of Paratus. “PriceBuilder finally gives owners an accessible way to improve their business valuation and prepare the sale of their business.”
The community was soft-launched to allow Chinook clients to use it earlier this year, and will go live today.
aduffy@timescolonist.com
