The House of Cheese, Mrs. Tiggy Winkle’s, Nettleton’s Jewellery … most Ottawans were sad to see these well-known local businesses close in recent months.
But according to Michelle Groulx, executive director of the Ottawa Coalition of Business Improvement Areas (OCOBIA), closures such as these could be prevented with more support for owners considering exiting their business.
“Small businesses should start thinking about a succession plan now. They do it because they love it, but they don’t think about the plan and people who are renting or have a customer base are afraid to talk about it,” she explained.
To better understand the issues preventing business growth and economic stability, the most critical piece of the puzzle is often people.
According to a January 2023 report from the Canadian Federation of Independent Business, over $2 trillion in business assets could change hands within the next decade as 76 per cent of small business owners are planning to exit their businesses.
“When you’re thinking about closing your business, usually there’s somebody out there who has the time, resources and energy to pick up the torch,” Groulx said. “I hope that starts to happen in our city, because we’ve had quite a few long-standing businesses close recently.”
Earlier this year, The House of Cheese in the ByWard Market closed its doors after almost 50 years in business. The Feline Café in Westboro also closed this year after only six years, a COVID closure that was particularly sad for Groulx. The shop served café fare and had a separate lounge where visitors could play with cats that had been rescued by the Feline Café Foundation.
“It shocked me because, a few years ago, I would have loved to have opened that place,” Groulx said.
Retirement was listed by CFIB as the top reason business owners cited for leaving their business (75 per cent), while 22 per cent were burned out and 21 per cent wanted to step back from their responsibilities as owners.
However, the report pointed out, only one in 10 business owners had a formal business succession plan in place.
At the end of 2022, Nettleton’s Jewellery in the Westgate Shopping Centre closed, wrapping up 106 years in business as brothers Geoff and Cameron Nettleton sought retirement.
“We were hoping to keep it going longer, but with the perfect storm hitting – age, health and lease – we have to reconsider,” Cameron told OBJ in October 2022 before the store closed. “The lease is too expensive, our health is still good, and our age is getting up there.”
The brothers said that, while they loved their jobs, it was no longer feasible for them to operate the store as co-owners. However, they might have liked to see it continue under different ownership.
“If someone took over ownership and operation, I’d work here,” said Cameron. “But I always say I want my name at the top of the cheque, not signed on the bottom.”
Taking over an established business can significantly minimize startup and branding costs for a new owner, Groulx explained. She also lamented the loss to the community of well-loved businesses such as Mrs. Tiggy Winkle’s, which opened its familiar toy store on Bank Street in 1977 and closed it in 2020 along with its other locations in the city.
“I hope we see a transition to new business owners from near and far instead of doors just closing. It would just be sad because we get so connected to them,” said Groulx. “They really do have a longtime following and longtime supporters and consumers, not even just from the neighbourhood, but they’re somewhat of an attraction for tourists.
“Like Mrs. Tiggy Winkle’s. That business helped make up the character of the Glebe, they’re part of it, and a little piece of it is lost. How long does it take to recover that?”
The most common obstacle to succession planning for about half of small business owners is finding a suitable buyer or a successor, the CFIB report found. Nearly 50 per cent of owners struggle to measure the value of their business, while 39 per cent say the business is too reliant on them for day-to-day operations.
Part of the solution is finding adequate resources and networks for small business owners who are considering buying or selling a business, Groulx said, while also ending the stigma around transferred ownership.
“People might misperceive succession as a failure. It’s more about planning; you want to leave the game with your shirt on and pass the torch. You might not know about a business being for sale,” explained Groulx. “There’s this inaccessibility and people are not talking about it.
“We’re only beginning to start talking about it nationally at this level. Mergers and acquisitions are always talked about for enterprises, but not for small business and the big gap is us talking about succession,” Groulx added. “Honestly, I just don’t want to see another empty store that was awesome.”