The challenge of selling the entrepreneurial dream to young people

In the spring of 2023, two employees of Café Pékoe, located in lower town of Quebec, bought the company founded in 2016. Alexandra Maltais and Josiane Thériault, then aged 30 and 32, are among the rare young buyers in the province.

It’s like you’re boarding a train that’s already moving and you have to keep it at the same speed. Ideally, it should be moved forward even fasterexplains Alexandra Maltais, sitting at a picnic table in the small neighborhood café.

Female entrepreneurs, who have gone from the status ofemployees to that of bossesare part of the 5% of young buyers in Quebec.

It was a good challengebreathes Josiane Thériault. Receiving restoration financing is not easy. This is a saturated and risky field.

A financial contribution from Alexandra’s grandparents helps the entrepreneurial couple put in the necessary capital investment to buy the business, a boost that helps the young woman achieve a old dream.

It’s certain that we didn’t start the business, but we’re slowly putting our own spin on it and starting from a framework that exists.

Transfers outpace business creations

Business transfers have increased considerably since 2015. In 2021, there were 8,600, thus exceeding the creation of new companies, according to the latest data from the Quebec Business Transfer Center (CTEQ).

In 2021, the Capitale-Nationale was second, after Montreal, among the most active regions in terms of business transfers in Quebec, according to the Desjardins Movement.

This year, more than 2,000 business transfers are expected throughout Quebec, which is a lot. These are total values ​​of more than $3 billionsupports Jean-Yves Bourgeois, first vice-president of business services at Desjardins Group.

The record number of companies to be transferred to Quebec can be explained firstly by the aging of owners and a decline in intentions to start a business. An estimated 34,000 people plan to sell their businesses over the next five years, according to estimates from the Business Research Institute. PME and Statistics Canada.

It’s really our economy that is at stakeworries Pierre Graff, CEO of the Group of Young Chambers of Commerce of Quebec. With potential business closures, it is estimated that 1,000 businesses could close in the next 12 months due to lack of replacements.

In Canada, tens of thousands of businesses are at risk of closing due to lack of buyers, and most have no succession plans. According to the Canadian Federation of Independent Business (CFIB), 76% of business owners PME will pass the torch within 10 years.

Difficult to sell the entrepreneurial dream

In 2021, young people aged 18 to 34 represented only 5.2% of new buyers, a decline compared to 2015 when they represented a proportion of 5.8%.

When we talk about entrepreneurship for young people, we often tell them: ”There is also takeover.” There is much less risk of taking over a business which perhaps already has solid foundations and an existing clientele.explains Jean-Yves Bourgeois.

For Pierre Graff, taking over a business rather than creating it from scratch is less sexy in the collective imagination than starting a business.

With demographic changes and retirements among business owners in Quebec, we really saw a gap between this number of people and the number of people who were considering entrepreneurship as a career in entrepreneurship in its own right.deplores Pierre Graff.

It is for this reason that the RJCCQ established the Mouvement Repreneuriat initiative to raise awareness and equip young entrepreneurs. Still, the financial means required for a business transfer represent a significant obstacle for young people.

The capital investment required to take over a business is approximately 5 to 10%, which can equate to financing of several million dollars, explains Pierre Graff.

This down payment is less available when you are 25 years old than when you are 35 or 45 years old.

Takeover involves buying the company immediately and investing a lot of capital, which constitutes an immediate financial risk that comes with a psychological and strategic burden. Conversely, challenges come more gradually when starting a business.

However, the companies whose ownership has been transferred are among the most successful in Quebec. They had average annual revenues of $4.8 million in 2021, or 9.2 times more than those generated by new businesses, according to the CTEQ.

I wanted to be my own boss

In 2021, engineer Jean-Michel Talbot got his hands on the kitchen cabinet manufacturer Milmonde in Notre-Dame-des-Pins, in Beauce.

In full disclosure, I could have purchased an earplug or bowl company, provided I was in the manufacturing field and within 100 miles of my homesays the entrepreneur at the start of his forties. I wanted to be my own boss.

Upon his arrival, Jean-Michel Talbot began a strategic review of the company by implementing robotization and digitalization processes. Last year, Milmonde unveiled an automated finishing line that sands, paints and dries cabinet doors before quality control is carried out by artificial intelligence. This project, which Jean-Michel Talbot affectionately nicknames her babywas made possible thanks to investments and a non-repayable grant of $1.19 million paid by the Ministry of Natural Resources and Forests of Quebec.

The entrepreneur is pleased to be the first carbon-neutral manufacturer in the cabinet industry and wants to become the first in the world to use a nanotechnology paint that decontaminates the atmosphere.

There were already green roots at Milmonde. He was one of the first players to convert to water-based paint. We are therefore taking the same direction that was started by the last owners, but we are pushing a little further.