Foresight and Adaptability: Navigating the Complexities of Exit Planning

Welcome to Legacy Builders, strategies for building successful family enterprises. Brought to you by Beacon Family Office at Assante Financial Management Limited. I’m your host, Cory Gagnon, Senior Wealth Advisor. And on this show, we explore global ideas, concepts, and models that help family enterprises better navigate the complexities of family wealth.

Today, we welcome Anne Evamy, the Owner and Advisor at Junction Point Inc. As a Certified Value Builder and Family Enterprise Advisor, Anne brings a unique perspective and a wealth of expertise to the realm of family businesses and succession planning. With a remarkable background as a successful entrepreneur, Anne honed her skills in the Family Enterprise Advising space as well as in Exit/Transition Planning, Preparation, and Strategy & Value Acceleration for family and non-family small to medium-sized businesses with 1 to 10 million dollars in revenue. Having owned and operated a prosperous marketing company for 16 years before successfully selling it, she has firsthand experience in the challenges and triumphs of entrepreneurship.

My goal is to be the most curious person in today’s conversation with Anne Evamy, where we explore her transformative journey from growing up in an entrepreneurial family to becoming a trusted advisor for family enterprises. We’ll delve into the pivotal experiences and insights that have shaped her holistic approach to guiding families through the intricacies of continuity and value creation, all while emphasizing the power of intentionality and adaptability.

Now let’s dive in!

Cory: Welcome, we’re excited to have you here today to share your wealth of knowledge and experiences. Let’s dive in. Shall we?

Anne: Absolutely. It’s a pleasure to be here.

Cory: imagine you’re delivering the commencement speech to the graduating class of 2024, and you have the chance to inspire them with your story. How would you begin your speech to convey the incredible lessons and expertise that you’ve gained along your career?

Anne: Boy, how would I commence? I think the excitement of the fact that life is a journey and you can choose what your journey is going to be.

The biggest lessons or biggest things for people to think about especially when you like say 22 coming out of university or thereabouts. It’s a little bit daunting going forward and thinking that you have some control. I would say there’s sort of 4 things that I would say.

One is to live really intentionally, be really intentional about what you choose to do, and dream big. Dreams take you to places and give you that sense of fulfillment if some of them come true, not all of them will, but some of them will so dream big.

I think the one thing that I’ve learned is to play to your strengths, understand your strengths, play to them, don’t fight a weakness, don’t worry about a weakness. So play to your strengths and lastly, love deeply, especially those who truly love you.

Cory: Great. I love that. Going back to the journey and life is such a wonderful journey. I resonated a little bit on when you said thinking that you have some level of control. What does that mean to you then?

Anne:  Level of control, what it means is you might have a number of expectations that you think that you can control and often I believe what I found in my lifetime is some of those you can, but a lot of it you can’t.

I think as I’ve always said to my kids, always have a plan b, and be adaptable, doesn’t mean that you have to lower your expectations or completely change your direction, but don’t be afraid to modify and find a way forward with perhaps something that you didn’t quite expect.

Cory: Okay and the intentional part of things, at this point, how have you lived that word within your life?

Anne: Well, when I was a little younger, who I’d be speaking to in this commencement speech, I often thought of what would you say if you were in a rocking chair on a deck, when you’re older and looking back over your life? what would you want to say about your life? That’s what I would have said then.

Now, I say at my age, living intentionally for me, really came to light this past year for me when I had a fairly big birthday and I decided to do 5 things a month. 60 things in my year and I outline them as to each quarter of the year.

Some were related or where I may or may not be, physically, geographically or whatever, and thinking about what I wanted my year to be and what I wanted it to include. It didn’t have to be things that were huge.

They were anything from a trip, and really intentional about that trip. It was spending time with different people, and doing things that I’d always wanted to do. Two things that stand out in particular which aren’t necessarily big things, one was we have very good friends who are sailors and I always wanted to go on their sailboat.

It never seemed to find the time. So, I went out for a weekend out to the coast and we spent a day on their sailboat and they made me a birthday lunch. We had sparkling wine and they had farmed the spotted prawns out of the bays out on Vancouver Island. It was a beautiful experience, it was about them but it was about it was initiated by this birthday.

The second thing was finally, taking piano and I do that weekly and I’ve been doing that so very intentional about what I wanted as far as an outcome.

Cory: Right. Now as far as the intentional part and on how that relates to your experiences in your career, some of the work that you do now. How have you found that has impacted you?

Over the last year, maybe a little bit fresh from that perspective but in previous endeavors and where you’re at, how do you how do you approach things? Thinking of that intentionality.

Anne: Well, I think the intentionality going back to the one comment I had was played in my strengths. I think that is part of it. Being very aware of what’s going on around you from a business standpoint, what’s actually happening in Alberta in Calgary? Where do things fit together? Where can you fit within that?

Both in business with family, particularly in your different life stages. As fellow FDA, we talk about the different life cycles of a family. Whether it’s the grandparents, the parents, the kids, whichever generation we’re talking about.

Being aware of where everybody sits and what the future brings in the intentionality within that and the preparedness.

Cory:  Now thinking about that, what’s going on around you? Because you can be very concerned about what’s going on in the world and there’s a lot of scary things that happen all the time. You could be very focused within your family, within your business, within your industry, Where do you see the balance from that perspective?

Anne: I think, one really has to consider that because you can either get drawn into the drama and the negativity. Obviously, with a lot of media there these days, there is a lot of negativity about that.

But, that’s where you find the strength of a strategy, having intentionality around a strategy, and having the foresight to know where you think you want to go. Again, back to my comments about adaptability and always having that plan b because a plan isn’t always a straight line.

Adaptability in that and ensuring that you don’t just let things happen to you, you have intentionality about what direction you want ahead and nimble enough to modify as you need to or want to.

Cory: Now going back to the playing on strengths because I know of your history, you’ve definitely taken your strengths and utilize them in different ways.

How do you see entrepreneurs doing that or how have you done that well through your career?

Anne: I think that I came from an entrepreneurial family, so you learn a lot from osmosis watching that, living it without necessarily even realizing that. It’s really exciting because you can dream big.

So back to that comment, some things will work out and oftentimes any entrepreneur you talk to goes. We try a gazillion things and a few of them have worked and many of them haven’t. And I think it’s that “pick yourself up”.

I ride horses as well, so you have to get back in the saddle. If you get bucked off, brush yourself off and keep going, try a different way. Back to the adaptability, and the intentionality and trying to find the right road to go down.

It’s an exciting career, for sure it’s never dull. Good years, not always excellent years, but good years and you’ll learn a lot.

Cory: Now foresight and strategy. Foresight and oftentimes, I hear entrepreneurs talking about 3 to 5 years. It could be I’ve got a strategy for the next 3 to 5 years. It could be, I’m going to transition in 3 to 5 years. There’s oftentimes that’s the time frame that people think in when they’re looking out forward.

How do you see the ability to have that foresight and be adaptable within that strategy when the time is right to either take the different road or know that maybe things are requiring change?

Anne: I mean, it can be as simple as the finances dictate that. Energy levels dictate that your team, your staff, your advisors, whoever it is that are part of that.

I think you have to have a real honest lens on things and realize this is part of you.  Never want to say entirely listen to your gut, but I think you have to do that to a large extent because that’s what the excitement of being an entrepreneur is as well that you can see something that others don’t. If you believe in it, you pursue it for as long as it makes sense to your capacity, and the capacity can be financial energy or health, or any number of reasons.

Cory: Now, let’s go back to the people around you. You mentioned your team, and your advisors, when we talk about family enterprises, there can be many blurred lines between those people and what they’re wearing at what time.

How have you found working with advisors prior to your role now? Leveraging the strengths of those people around you.

Anne: I would say in my experience, and this goes back probably 40 years ago, as a young newlywed and my father was an entrepreneur and having advisors around, as things changed, Calgary was very busy at that time.

About 10 years later when my father passed away, for those of us in the family that were dealing with his estate. Critical to our strength as we grieved and understood, trust so we had some good advisors with us, some better than others. We didn’t really know how to qualify or quantify what they were giving to us at that time. I certainly know a lot more now, I would suggest there was a lot of trust in getting referrals.

There was some level of multidisciplinary advising in that and having them work together. There wasn’t necessarily one that was the quarterback. I sure wish that at the time we’d known of family enterprise advisers and perhaps set an understanding, which would have been back in the day.

Like how to have people in the non-fiduciary, non-financial, non-legal discussions, about that. Thankfully, my mother was very intelligent woman with a lot of foresight and was able to navigate that. That was my first real exposure to advisors and it was obviously in the situation and then subsequently have been more but super critical that you’ve got a group around you.

I say that as somebody who needed advisors, supercritical to figure out a way to get your advisors to work together, have somebody who’s kind of taking the lead but is a really good facilitator in ensuring that you pay attention to everybody’s strengths of what they’re bringing to the table. And that they’re looking at your situation holistically.

So, stepping that forward to what I do these days I hope that that’s what I can bring to the table.

Because I recognize how important that is for a family. It can be very confusing, especially if there’s a low level of financial literacy or even legal literacy, it’s very daunting for those who aren’t necessarily, sort of in the mid of understanding the business, perhaps, if that’s what the family has an op co or even if it’s other assets.

Whether it’s real estate or otherwise, just having the literacy to really understand what’s going on and therefore, then the communication around that, which is why family enterprise is so important.

Cory: Now going back to that point in your life as you mentioned, the strengths of your mother and being able to pivot when the time was needed, how have you found and you made the comments about literacy and the amount that you’ve learned since that point.  How did you find that having your level as of literacy as a newlywed and your mother’s level and your family and those around you, how did you find that that either caused some disruption or maybe even where you were?

There were some strengths that you leaned on. How did you find that position? Sometimes we hear stories where somebody passes and everything blows up and does not go right.

Anne: I think that and kudos to my parents, I would suggest that there had been communications for quite a while. There was familiarity with the people that we were dealing with. There was some trust built in that. The critical thing to that was some preparation in the early days when we were very young, there was lots of discussion around you whether it was allowances or how things sort of work.

There was a basic level of literacy and trust in the discussions and it was okay to discuss those things.

When it got to the time when you are grieving, obviously, you’ve got that on top of whatever the specifics are of an estate, which can be complicated. In many cases, sadly, the statistic is that 50% of people have a will of those and 50% of them aren’t even up to date.

You’re either leaving yourself exposed to what the government decides where the estate lies or not. to It’s up to everybody their responsibility, just having a bit of basic literacy or at least the people in place to ask that you can trust.  It sure helped me now as a parent.

Both of my kids just got married last year and the discussions very early on were to discuss things on both sides,, have you actually talked about your cohabitation agreement? It’s not just financial but how are you going to deal with these things and understanding how you’re coming to the table to a partnership, whether it’s a business partnership or a personal relationship, and not being scared to talk about it, and recognize that one may know a little bit more, but you learn together.

I’m thrilled with my kids because they have learned to have one of the toughest conversations probably of their marriages at the beginning, and I’m hoping that sets them up well for any other discussions that they will have on their journey

Cory: Now, he made a comment of learning together, and I love the idea of learning together. How have you seen that through life? Like, thinking of your kids now and where they’ve where at and how have you seen successful families and maybe within your own or maybe some of the families that you’ve done work with where they’ve successfully learned together?

Anne:  I think it’s understanding that you include each other in your lives and your interests.

Whether it be a parent bringing kids into ever working in your business or not is to be figured out in time but, including them in what you’re doing so that you learn to have an understanding and an appreciation for their perspective of why they’re at the office so much or whatever that may be.

On the flip side with your kids really taking an interest, on that side because generally generationally will bring you closer together.

Perhaps a little bit more empathy about why your parents who were born in the sixties are different from you born in the nineties or your grandparents born in the thirties or whatever it is. This just opens the door for unity and more harmony. 

Cory: As you mentioned, those kids may not work in the business or take over the business. The conversations where you see those beginning or how those are conducted with families and within those businesses, how have you seen successful families or successful conversations within families as it relates to some of that transition?

Anne: Well, I think they’re very hard conversations, I think there’s a lot of families that can’t have them or don’t know how to have them, which is why facilitation really helps.

Going back to what we’ve learned in the FVC program is the 3 circle model, which is the circle for family, one for ownership, and one for business. When they intersect, like Olympic rings, where they intersect is where the complexities happen.

It’s important to understand that if you’re a family member, which hat are you wearing? And if you’re in family and in business, what are the things that you have to consider?

The family has to consider and even the next-gen has to consider about things like what they want to do on the parent’s side. How do I do this, what are the questions that you have to ask in the preparation for, expectations, employment, policies both for your family and for the optics from your depending on the size of your business, the optics from your staff?

But certainly, I grew up in an environment where there were two families in a partnership when we were the kids, and none of the five kids ever went into the business that the parents, the fathers were in, in this case, mostly because they put into place a no nepotism, which is one way to deal with it but, to have those discussions about because if you have a sparkling kid who is headed that way, how do you encourage them? I’m not to the detriment of the others, but, having those discussions.

Cory: Now working in the business and as you said, your father and your partner and his partner had made these arrangements that limited that participation by the kids, which might have been absolutely the best thing for the situation, or at least it was the best thing that they thought at the time.

Working in the business requires, as you said, some qualifications but there are also some qualifications of just remaining owners of that business. As that business passes on, and maybe there still is an operating business that isn’t sold. what things are required from that perspective?

Anne: So, if there’s still an operating company?

Cory: Yes.

Anne: Well, I think that as far as discussions with the next-gen?

Cory: Exactly.

Anne: The big one is, well, is there somebody professional who can go into that? Or do the kids actually want to be participants in that? I think that’s really the bigger question. Do they have the education, the qualifications, to do that?

In what kind of time period, I think that this all boils down to again, the foresight of the leader and at what point have they got a plan for succession and outlining that so the next generation has an idea of what that path might look like and does that path appeal to them?

How does that affect any siblings or cousins? I mean, depending on if you’re 1st, 2nd, or 3rd generation If you’re going from 2nd gen to 3rd, the cousin consortium, are there other members of the family? Are there spouses? Looking at your employee group as well, is there a management appeal management, buyout management integration, or somebody from the outside?

Participation in a business doesn’t have to be active. It can also be passive. They could sit on a board. There could be an element of an opco that they have or a fill-in throughout the car to it. that, so I think it really depends on the appeal, whether you’ve got somebody who’s really interested in that next-gen to go forward.

Cory: Now, if we go back to the business, as you said, the management and maybe it’s not a management buyout or a level of ownership of the business from management, but that business needs to be strong to succeed whether there’s family working in the business or not.

Some of those conversations that you have these days, how are you supporting people in that transition and ensuring that they have that strong management team?

Anne: Well, it’s very individual, as to the size of a business as well, I think they have to have those discussions with their management. If they and if there’s family that is involved, they really have to set some parameters as to what it is that they’re looking for because you can’t sort of compare situations without some parameters or some policies in place.

If it’s a qualification or education level that’s required in order to do those jobs. Those employment sort policies are really important and interest from both.

I mean, if nobody who’s part of your staff really wants to take on that role, either because they don’t feel qualified or they might be fearful of the family, dynamics, or dysfunction. If it’s not clear to everybody what the processes are, the chaos could continue.

Cory: In previous episodes, I’ve had guests where we’ve talked about bringing in that CEO from the outside and how difficult it is to bring in that CEO when there’s a family ownership group and if they don’t have that governance set up. Also, how it can cause turmoil within the business and for the management.

Let’s talk about that and the struggle of releasing control. The replacement of the CEO, be it management somebody who is qualified or that’s worked alongside that leader, or maybe it be somebody from the outside or maybe there’s a next generation who is qualified and has an interest. How do those conversations go?

Anne:  Those are tough ones. It takes a lot of courage and acceptance for a founder often or he person who’s been running the company for a long time to finally be prepared to release their control.

I think that in some of the work that I do on the non-FAA side, but on the value builder side is helping people who are considering a transition in the future might be 3, 5, 10 years later, is to talk about what’s pushing or pulling you potentially away from wanting to or going having to transition.

It’s just all about do you want to design your exit by default or by design? Like, you actually want to design it. By having those conversations and as I say, it takes some courage to do that because it’s hard as you get older. You realize that you’re going to be less relevant and a lot of people struggle with that.

If you don’t deal with that then the next people who are coming up, you might not have the right perspective on how they fit into the equation. If you’re fighting that, then it’s going to be a fight with who whether it’s an outside management or a family.

And then also having that next-gen or the management understand what that leader is going through. It’s a process,; it’s not a decision. It just has to take time being aware of those dynamics on both sides.

Cory: Now that intentionality, as you said, by default or design, what does that do to the salability of the business?

It might not be the decision to retain that business through generations, and maybe as you as you say, by default, maybe it needs to be sold, by not planning some of those aspects that you talk about, what does that do for salability?

Anne: Well, there’s two things there. I think one, it is perhaps my training. Every business should be run as if to be sold.

If you run it like that, whether it’s a family business or not, the benefit of doing that is that you’re always running the business to be valuable and sellable, hopefully, profitable as well, but always valuable and sellable.

There’s a whole number of attributes that make your business more sellable and appealing than not. So in particular, a lot of businesses get stuck with just one supplier, one employee, I. E. the rainmaker. One client dilemma where it really doesn’t make them a valuable business because of the moment you lose that entity. However, on the flip side, which is interesting. The family nest is so important in a family business that makes them appealing to the brand and so on.

if business is looking at that, they also have to think about their succession and transition again by design, hopefully. I was speaking with somebody yesterday whose 2nd generation business, and it was really interesting. Lots of foresight with them, and they were talking about a 10-year plan.

They’ve got my back to my comments about a plan A and a plan b. The plan presently is, to do this for this 5 year period this for the next 5-year period at which point they will find a successor. It could be a family member or not. They could be sellable, but they could not.

But they’re running their business to be a valuable, sellable business, because it gives them options.

Cory: Right. Yes. And that optionality is as you speak of allows people to pivot when things don’t go the way that that they thought they were going to go.

Anne: Absolutely. One thing that I’ll say just from a personal standpoint, I had my business, had 10 of us in the business, and I got approached by my largest competitor.

It wasn’t for sale, I wasn’t even thinking about it. I hadn’t thought about the transition. Which is so many people’s situation. Head down working my business, great team, and so on.

We went down that path and then I said, I decided I didn’t want to sell. I’d gone to my staff and said, we have these options. We keep going.  These are the 3 options kind of thing. I have somebody who’s interested in in buying the business, so we pulled out of that in about a year later. We talked about the Ds, this and that, distressed disability death, divorce as reasons why often businesses fail.

A year later, I had four of my staff with health issues and my son, with some mental health issues at the time, and I got approached by the acquirer. Again, “How’s it been going on for the last year?”

I said, “well, actually, all of this has happened. Are you interested in selling?” I said, “Actually, yes”.

All of a sudden, I’ve gone from a position of strength to a position of it wasn’t desperation by any means, but I hadn’t thought through those things. It changes your optionality.

All of a sudden, that one company I’m looking at doing a deal with instead of being able to present my business to a number of them. All of a sudden, your options are smaller.

Cory: Oftentimes, there’s desperation in decisions, be it a sale because of one of those as you mentioned, there’s other forces and stressors on people.

Going back to either having your head in the business and being so focused on the business or being so focused on the world around you, how do you balance that to where those options where you might need to be prepared so that those decisions at desperation have some ideas from that perspective?

Anne: I think that’s where staging and preparing back to the comment. Do you want your exit or transition to be because of default? I. E. One of those deeds or do you want to design what your exit is?

The strength of the discussion of the person I had a conversation with yesterday was, that he was designing his exit. Maybe that’s what’s going to happen but the fact that 10 years, hence, he has that in mind, it means that everything that he does about his business and his personal life is intentional.

Going back to my comments at the beginning, being really intentional is at least a path to follow and it might not be likely where you go, but it’s likely going to be pretty close.

You have a higher chance of that, than if you don’t plan. It’s really kind of a choice, and we all have that choice. It’s a matter of whether you can oftentimes as they say most entrepreneurs have their head down and tail up and they’re working in the business rather than on the business.

That’s another attribute is to really pull yourself out of it and plan, think about the future, have the foresight

Cory: Right. I like the relating back, as you said, planning and designing that exit, it really also allows you to do that gut check easier. Because you’re not gut checking to what’s the weather today. You’re gut-checking to your plan.

Anne: Your plan. Exactly.

Cory: Great. As we near the end of our conversation, there are a few questions that I ask each guest before we wrap up. Are you ready for the tough ones?

Anne: I think so.

Cory: Alright. What’s one strategy that you believe is the most essential for building a successful family enterprise?

Anne: I think it’s back to the word foresight. Life all can only be understood backward, but it must be lived forwards. If you do the act of thinking and thinking about the future, I think it, gives you a path forward.

I love that. And what is the most common challenge that UC Family Enterprises encounters when it comes to wealth transition and generational continuity, lack of thought, lack of foresight, or putting the time to discussing the really important topics of the of the future.

In a nutshell, the best strategy is intentional communication. Communication is at the heart of all of this, but intentional communication and planning where you have a family meeting. You talk about your future as a family, whatever your family includes.

Having the strength and courage to pull everybody together to go this hour or these 2 hours or whatever. We’re going to have a family meeting and it’s going to be about these matters. Everybody has a voice. They don’t necessarily have a vote but everybody has a voice. It helps to build unity for a family and identity that you’re part of this family.

Cory: I love that strength and courage because getting started, as advisors, we can say, we need to have a family meeting but that is daunting for people who haven’t developed that muscle of communicating regularly. I love the strength and courage.

Anne: Yes

Cory: And in your experience, what are the top 3 qualities that successful family enterprise leaders possess?

Anne:  I think, just talking about communication, again, communication skills. Down and again, strength and courage. With that, I am willing to communicate about any subject, like things off the table. With parameters. Right? And sometimes that’s where a trained facilitator or a good facilitator is really helpful.

Also, I’m going to say foresight. I think somebody who can is a bit visionary and can think of the future and not be scared of that. Then I really think a successful family enterprise leader, ‘d be somebody with a really strong desire and commitment to continuity and succession and harmony within that.

Cory: I love that. That’s a great way to make 3 out of so many great aspects there. Before we conclude our discussion, I’d like to highlight you where can listeners engage more in in the conversations that you’re having, either it be, your online or some of the things that you’re participating in.

Anne: Sure. First, I would say I love talking to families. I’m always keen to have a coffee. Certainly, personally, you can contact me by email, LinkedIn, or phone, whichever always happy to chat and redirect as, as the situation requires.

But I think one of the biggest things, I’m an FEC Ambassador, so an ambassador for Family Enterprise Canada and I think that the organization has some incredible support for business families, in particular, all generations

And I’ve seen it. I do participate in some of the family enterprise peer groups where you have different family businesses. Seeing some enormous support conversations where you get first or second generation, different ages just kind of arms around each other.

I think that’s a great organization to join. They are having the symposium this year at the end of May this month here in Calgary which is fantastic because normally it’s somewhere else in the country. The theme is on impact, and I just think it’s a really strong community.

Cory: Awesome. Great. And I wanted to make sure that we’ve covered everything. Is there anything else that you’d like to share with our audience that we didn’t get a chance to touch on?

Anne: No. I know I could talk forever, but I think we’ve done it.

Cory: Great. Awesome. Well, thank you Anne for taking the time to share your expertise and experiences with us today. Your insights have been incredibly valuable to me, and I’m sure they will be to our listeners as well.

Anne:  Thank you very much. It’s a pleasure.

Cory: Thank you.

Disclaimer: 

This program was prepared by Cory Gagnon who is a Senior Wealth Advisor with Beacon Family Office at Assante Financial Management Ltd. This is not an official program of Assante Financial Management and the statements and opinions expressed during this podcast are not necessarily those of Assante Financial Management. This show is intended for general information only and may not apply to all listeners or investors; please obtain professional financial advice or contact us at [email protected] or visit BeaconFamilyOffice.com to discuss your particular circumstances before acting on the information presented.