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A new year has begun and with it comes challenges ahead for businesses.

Even though there are signs economic conditions are improving, such as a relatively fast drop in inflation and labour market additions, many small businesses are likely to feel the pinch of rising interest rates, the threat of a looming recession, and persistent labour shortages in 2023.

We reached out to Noah Jensen, a partner at Racolta Jensen LLP in Cambridge, to get a sense of what businesses can expect in the coming year:

Q.  What priorities or potential pitfalls should businesses wishing to expand in 2023 keep in mind?

Noah: Keep acquisitions open as an option. There are quite a few business owners with established businesses who are looking to divest themselves into retirement. Lower-mid market acquisitions (say, less than $10 million in value) are starting to see more supply than there is capital for private equity/investment firms to invest, especially on smaller deals. Acquiring an established brand with a customer list and team of trained employees that have complementary customers, production process, and/or supply chain partners can help achieve more scale by eliminating redundancies in the combined business after the acquisition is complete.

Avoid over-committing on cash, or over-hiring of employees. In the start-up world they   call this “lengthening the runway” by containing overhead costs. Labour is a fixed cost in the short-term and a variable cost in the long-term, be selective on who is being hired for what as many customers in the business-to-business landscape are being more thoughtful about purchases and many things are being delayed.

Q. How should businesses prepare for potential economic slowdowns this coming year?

Noah: Evaluate pricing. Costs have risen substantially in the past two years and there are still some businesses that have not adjusted their prices to their customers. If you have not changed pricing because your competitors have not changed theirs, you may have an issue with productivity to look at. If the market price has gone up and you have not changed your price, look at a price increase as an option. If your customers are unable to accept a price increase, look at the profitability of the relationship and consider not serving the client any longer.

Be clear on terms of payment with customers and suppliers to think through forecasting your cash flow over the next several months. Look into how this can be done with your accountant and/or bankers to see about a back-stop financing facility if needed. It is generally better to ask for financing facilities when your company is showing good financial results. You will not regret doing so now before things get too grim.

Think through your cost structure for any commitments to experiment with new products or services for your business that you thought would improve the productivity of your business. Are they all working? Is there anything that could be cut?

If you are in the business-to-business market, talk to your customers. What trends are they seeing from your competitors that they like or don’t like? How could you provide a better solution for them?

Do you have any redundant assets on your balance sheet? This would be assets that have no value to the operations of your company that have monetary value.

Q. Will this be a good year for businesses to make productivity investments?

Noah: Productivity investments will need to continuously be considered in today’s economic climate. Whether you are in dairy production or robotics, your competitors are purchasing equipment and/or software that is allowing them to get work done with less labour (a necessity in today’s labour market).

Q. How important is it for businesses to ensure they have a solid succession plan in place?

Noah: It is important to always consider the contingency plan of your business. If you are young with the intention of running your business for the long-term, failing to plan for what happens if you are suddenly disabled or facing terminal illness will put you and your family in a precarious position if any of those events transpire and you are unable to run the company. Certain insurance products mitigate the financial impact of this, but you still need to consider what shape your company will be in if you are eventually able to return to work.

If you are older and considering retirement, you should be thinking about this five-10 years out. Some considerations:

1. Customer concentration: try to avoid having a lot of revenue tied to one customer relationship
2. Supplier concentration: try to avoid having a lot of your inputs concentrated with one supplier.
3. Management aptitude: always be grooming someone else (or a couple of internal candidates) to do your job.
4. Cash flow: the valuation of the company is often determined on a multiple of cash flow. If you are selling at five times multiple, a $1 increase in cash flow increases your value by $5. So, make sure you are dialed in on profitability.
5. Structuring: the structure of corporations will make a difference in the taxation of the sale, and you should be thinking of this a couple of years prior to sale.

Q.  What should business owners consider if they are planning an acquisition in the coming year?

Noah: Be aware of market trends. With uncertainty in the system related to financing costs (interest rate driven) and risk tolerance of people investing in private companies, there will be ebbs and flows in the low-mid-market mergers and acquisitions environment.

According to a recent poll, 2022 Q4 had a pull-back in interest on the buy-side of acquisitions which could indicate that the bargaining power could tilt in the favour of buyers rather than sellers. We have seen a lot of interest in our existing clients wanting to sell. Mainly related to age/retirement.

Be aware of the quality of earnings that are presented. While many people had an amazing fiscal 2022, if you broke it down by quarters, they were increasing prices to their customers faster than they were adjusting their costs for labour. Additionally, certain industries would have been on fire during the low-financing cost era (residential/industrial construction, auto sector manufacturing), that will be facing downturns in the upcoming year or two.

Q. Will 2023 be a good year to start a new business?

Noah:  Every year is a good year to start a new business if you have a good idea or good contacts in a particular field. The difficult thing about right now is that people currently employed will probably be seeing the best of the best in terms of offers for their labour time and talents due to the shortage.

The upside to starting a business right now is that a lot of people throw in the towel when there is the amount of uncertainty as there is right now with the changing economic landscape. This creates new opportunities for people.

The decision by CTV’s parent company Bell Media to abruptly end its contract with its lead national news anchor Lisa LaFlamme this past summer sparked public outcry.

While touting the move as a ‘business decision’, accusations of sexism and ageism surfaced after the esteemed journalist let her hair go gray brought these issues into the spotlight and has sparked much conversation in the business world.

“It definitely has raised awareness and discussion and debate as some companies have been doing things to promote gray hair,” says Jessie Zhan, Associate Professor, Department of Organizational Behaviour and Human Resource Management, Wilfrid Laurier University, referring to Dove Canada’s ‘keep the gray’ campaign launched in wake of LaFlamme’s dismissal.

As a result of the publicity surrounding LaFlamme’s departure, Helen Jowett, President and CEO of McDonald-Green, a Cambridge-based HR Consulting Firm, says that Bell Media’s decision has left many in the business world questioning things about gender and ageism, noting the sudden end of the news anchor’s contract overshadowed the fact she was not given any real opportunity to have her long career celebrated.

“As a sixty something female, I too was disappointed that she had not been given the same respect that her male counterparts had been afforded,” says Helen.

Professor Zhan’s says issues surrounding sexism and ageism in the workplace aren’t new but have probably become more noticeable because of the whole demographic shift in the workplace.

“The population and workforce are aging and at the same time, in the workplace different age groups and generations are working together on a day-to-day basis and that makes ageism more noticeable,” she says, noting these issues, along with racism, make up the three main issues facing many workplaces and has been working with one of her students to investigate the intersectionality of sexism and ageism.

“In the literature, gender and sex and age have been studied separately but they’re not separate issues,” says Professor Zhan, adding that younger men and women in today’s workplaces do not seem to represent the stereotypical interpersonal perception of those older in which men are often perceived as being more dominate while older women take a more ‘supportive’ or ‘motherly’ role in the work environment. “The younger generation really tries to protect their gender equality in the workplace or making those gender differences less noticeable.”

Helen agrees, adding having various generations working together can also result in valuable mentoring opportunities.

“Many cultures revere the wisdom of age and I’m encouraged that the young leadership demographic rising today are embodying the desire to accept the benefits of diversity in relationships.”

Professor Zhan says in the workplace, age is the one constant noting that every worker will age and eventually become part of another work demographic.

“At different ages, people will belong to different age groups throughout their work career,” she says.

How to identify potential issues in the workplace

When it comes to identifying potential issues surrounding sexism or ageism, Professor Zhan says awareness is always key.

“It can be difficult to tell a person’s attitude,” she says, adding there may be observable behaviours in the workplace that may indicate an issue exists. “Are people interested in making friends outside their age group? Do you see people from different age groups talking to one another? Do you have the sense people feel comfortable working with others from a different age group?”

Helen says potential signs could also include something as simple as dismissing or exclusion of input, right up to psychological bullying.

“Leaders must be clear about the behaviours that they themselves model, reward and tolerate.  Early detection of out of sorts relations should be addressed with empathy, understanding and encouragement to resolve conflict,” she says. “Certainly, policy and process for safe communication of escalated behaviours should be well communicated, reported and disciplined.”  

What can be done when an issue is discovered?

There are laws and regulations in place when it comes to gender equality, including the Employment Equity Act, Pay Equity Act, Canadian Gender Budgeting Act, and the Canada Labour Code. At the provincial level, the Ontario Human Rights Code protects people from age discrimination.

However, Professor Zahn says taking a good hard look at those in your workplace is the best first step before taking any further action or implementing new policies.

“If you spend time with your people, you will be able to tell whether those from different age groups actually want to work together,” she says, adding positive contact between intergenerational employees can reduce stereotypical perceptions.

Helen says encouraging and celebrating the information exchange between employees can go a long way to setting the tone for inclusivity of all people and preferences.

“Raising awareness of the strategic benefits of understanding differences should be spoken of often and openly,” she says. “There will always be something to be learned from someone else if we can embrace the learning offered.”  

And if policy changes are required, Professor Zahn says implementing age specific ones can be a benefit and could include providing training or mentorship opportunities to older employees or creating a clearer path for younger workers to switch to a role they may find more challenging and meaningful.

“Traditionally, when people talk about HR practices, they are age universal. People rarely talk about whether certain HR practices have the same impact for people who are younger versus older in the workplace,” she says, noting each age group values different things. “Most findings have shown age specific HR policies/practices that keep age differences in mind have a positive impact on employees.”

But Professor Zahn is quick to note there can be a negative side also to such policies and practices, explaining by highlighting these age differences may make some employees feel they are being treated ‘differently’ than others.

“It could hinder their performance or lower their self-esteem,” she says, adding there is a new stream of research being conducted highlighting benevolent sexism and racism in the workplace where ‘over accommodating’ employees can be just as harmful. “These actions and feelings are not always coming from the intention to harm.”

Are workplaces getting better at curbing sexism and ageism?

There is no real clear answer to this question, however, Professor Zahn says there is clearly more discussion going on centred around age in the workplace.

“When it comes to ageism, older people are not the only targets. Younger workers are targets as well,” she says. “They can often be perceived stereotypically as less reliable, and they may not get the opportunities to be promoted to certain advancement programs.”

As a result, it’s imperative to celebrate the multicultural and multigenerational perspectives found in workplaces and try to do things in different ways.

“Hopefully, we can value and celebrate that and enjoy the positivity,” says Professor Zahn. “The first step is always becoming aware of the problem.”

Helen says while most organizations are capable of recognizing differences in people’s gender, age, race, religion, ethnicity, sexual preference and many other observable differences, there are still strides to be made.

“Without oversimplifying, we must get better at recognizing and appreciating the strength of sameness and differences for peaceful coexistence,” she says. “Successful organizations learnt early that harnessing employee differences in a respectful way can actually be a strategic imperative resulting in improved support for their customers, suppliers and employees.”

A few steps to creating an open and equitable workplace:

1. Public profile. It begins with simple things like the website – ensuring that photos of employees not only demonstrate racial diversity but generational diversity as well.
2. Training and development. Training and development opportunities need to be communicated to all employees and seen as being fair to all ages and all levels. 
3. Manager training. They often inadvertently display biases. For example, they often request younger workers as hires and seeing them as more likely to stay (false), less likely to get hurt than older workers (false), and more malleable.
4. Promotions and new hires. Organizations must demonstrate their commitment to an age-inclusive workplace by promoting the most qualified and most capable candidates.
5. Workplace programs. Workplace activities must be seen as inclusive, targeting all age groups,
6. Encourage key older workers to stay past retirement. Hanging on to older and long-term employees will be vital in the talent-scarce future and organizations need to find ways to encourage their 50-plus employees to stay on and lure retired workers back.
7. Fair downsizing. In times of business downturns or corporate takeovers, it’s often younger workers who are redeployed, while mature workers are given the stark choice of being laid off or accepting early retirement packages.

Source: Monster.ca

The Cambridge Chamber of Commerce is easing its way back into hosting traditional events.

After more than 20 months since the pandemic began, the Chamber is set to host its first in-person Business After Hours event on Dec. 13 at Four Fathers Brewing Co. in Hespeler.

Chamber President and CEO Greg Durocher says is an important step for the organization.

“It’s a priority for the Chamber to start getting back to in-person events,” he says. “But whether they will be ‘normal’ as we all remember them, that probably won’t happen for some time.”

In fact, Greg expects future Chamber events will be of the ‘hybrid’ variation to a certain degree, providing Members the chance to attend in-person or remain in a virtual setting.

“That’s going to be for the benefit of everybody,” he says. “But we will certainly provide Members with value in regard to our content the best that we can.”

He says having an in-person Business After Hours event is important to many Chamber Members.

“It’s important for people doing business in the community to have an opportunity to meet safely with others face-to-face,” says Greg, noting the importance of following strict safety protocols and restrictions set out in the Province’s Reopening Ontario Act.

As a result, participants will not only have to register in advance, but proof of vaccination is required as well as identification that matches that material.

Just like restaurants, the provincial QR code will also be utilized at the event.

“Most of our events take place in other venues, such as conference centres, restaurants or meeting rooms that are not ours,” says Greg, noting regulations set out in the Act apply to these locations.

As well, the Cambridge Chamber Board of Directors recently passed a mandatory vaccination policy for the Chamber office for staff and visitors arriving for meetings or programs. Those with a valid COVID-19 vaccination exemption, or having valid documentation to present, will be required to take a rapid antigen screening test before entering. These tests will be provided by the Chamber at no cost.  

“These are precautionary measures put in place on behalf of the staff because our staff want assurances they are working in a safe environment and we’re doing whatever we can do to make sure that happens,” says Greg, adding like many businesses, the Chamber office is also covered under the Reopening Ontario Act and is entitled to invoke a vaccination policy.

Creating a safe environment will also be key at the Business After Hours event which is why the Chamber will provide colour-coded lanyards to participants when they arrive.

“Each colour will indicate that person’s comfort level of contact,” says Greg, noting that physical distancing and masks remain important. “Some people are very anxious to get out and meet others in-person, and others are anxious to get out and meet but aren’t quite comfortable enough to do so.”

Business After Hours takes place from 5-6:30 p.m. For more, visit https://bit.ly/3pdiUVI

An ongoing labour shortage continues to hamper Canada’s economic recovery in wake of the pandemic.

In fact, recent research published by the Business Development Bank of Canada (BDC) indicates that 64% of Canadian business says labour shortages are limiting their growth.

The BDC also reports that 55% of Canadian entrepreneurs are struggling to hire the workers they need and as a result, must now work longer hours themselves and delay or even refuse orders they can’t fill. As well, more than a quarter say they are having a difficult time even retaining current employees.

This news doesn’t come as a surprise to Mike Jennings, President of the Cambridge-based digital marketing agency MoreSALES, who has been keeping close tabs on the latest trends as employers in all sectors deal with continued labour shortages.

“The whole interview process is reversed right now. People aren’t coming in to interview for a job, they’re interviewing the company to see if they get to hire them or not,” he says, adding those in the skilled labour category are in very high demand.

According to CPA (Chartered Professional Accountants) Canada, Canadians in general have changed throughout the pandemic. While some decided being locked out of work provided them with the ideal motive to retire, at least 20% of the thousands who lost their jobs have changed sectors looking for work in places that not only may pay more but provide them with opportunities for advancement.

“A lot has to do with the culture of the company,” says Mike, noting surveys targeting millennials shows that flexibility at work and potential opportunities for nurturing and advancement tops wage expectations in terms of importance. “I think the smarter companies get it and those that are smart hire well will do well.”

He says more flexibility in terms of hours and the ability to work from home is key when it comes to attracting new talent, especially parents looking to return to the workforce following paternal leaves.

However, Mike knows this isn’t always the case for many companies, especially those in the manufacturing sector.

“If you’re a machine shop you can’t be all that flexible with your hours,” he says, adding in this case having an up-to-date website is vital since potential talent will do their research before submitting a resume. “If you’re thinking of working for a company that’s progressive and is going to pay well, you’re going to look at their website. But if that website hasn’t been touched in years and there is nothing about the employment situation or the culture of the company, then you’ve got a problem.”

As well, while social media is a great way to promote your company or business and attract potential talent, Mike encourages companies to be very strategic in their approach.

“It really depends on the company. If you’re a B2B company, I wouldn’t waste a lot of time on Instagram or Facebook,” he says. “I would focus more on LinkedIn or YouTube video clips outlining what the working environment is like at your company.”

He says connecting your staff on LinkedIn is a great way for potential employees to get a ‘sneak peek’ at your workplace.

“It will give them a sense of what kind of people they could be working with,” says Mike.

Visit https://moresales.ca to learn more.

Providing the necessary supports to businesses is vital, especially as work continues to rebuild our economy in wake of the COVID-19 pandemic by getting people back to work. 

One way to ensure the economic development of Canada is well positioned is by creating more opportunities for entrepreneurial newcomers who can not only help fill existing labour shortage gaps but work towards reshaping our business landscape by opening new businesses and assisting existing ones in need of solid succession plans as aging business owners look towards retirement. 

With that in mind, the Cambridge Chamber of Commerce has developed a policy through consultations with Members via its MasterMind series entitled ‘Promoting the need for Entrepreneurship Immigration’ which calls for the Federal government to examine ways to ensure that a percentage of the 1.2 million immigrants slated to be brought to Canada by our government over the course of the next three years be linked to the entrepreneurship stream.

The policy won approval at the recent 2021 Canadian Chamber AGM & Convention which attracted more than 250 Chamber policymakers and officials nationwide virtually over a two-day period. The approved policy now becomes part of the Canadian Chamber of Commerce’s mandate when it lobbies at the legislative level with the Federal government.

“This policy will target individuals who are entrepreneurs and business builders who come to Canada with money in their pockets to not only invest in this country, but more importantly to invest in their own businesses here that will create opportunities for other Canadians,” says Cambridge Chamber President and CEO Greg Durocher. “We’re always looking for companies that want to expand into Canada, but why don’t we look for people who want to bring their businesses and business ideas here? It’s a market that’s been left untapped and we hope this policy receives serious consideration at the Federal level.”

An estimated 181,000 of small business owners according to a Canadian Federation of Independent Business (CFIB) survey conducted last year said they were seriously considering closing due to the pandemic and at least 200,000 were facing closure. Coupled with the fact many small business owners on the verge of retirement have not created viable succession plans – a CFIB survey conducted in 2018 indicated more than $1.5 trillion in business assets will be in play over the next decade as 72% of small business owners leave their business – there exists many potential opportunities for new immigrants with an entrepreneurial spirit.  

A current shortage of workers, especially in the construction, manufacturing, and hospitality industries, has set the stage for skilled immigrants in these fields to enter the market and possibly use their entrepreneurial know-how and practical work experiences to create new opportunities in these sectors. 

The Federal government has been attempting to make strides in addressing the ongoing shortage of skilled workers in Canada which has been only amplified by the pandemic. 

In February of this year, it announced an invitation to approximately 27,300 workers with Canadian experience to apply for permanent residence. This followed on an earlier federal announcement in the fall of 2020 to bring to Canada an additional 1.2 million immigrants over the course of the next three years: 401,000 in 2021; 411,000 in 2022; and 421,000 in 2023. 

While this influx of newcomers is welcomed and needed considering there are growing concerns centred on Canada’s falling birth rate, a more focused approach to create an ‘economic immigration policy’ that not only provides ample assistance to newcomers but also ensures the needs of existing Canadian groups, including Indigenous entrepreneurs seeking their own opportunities, are not negatively impacted, would be beneficial.

“We have an immigration policy that is geared towards our economy. It’s a point system, largely generated on the skills newcomers bring to the table,” says Greg, referring to education and various qualifications. “The problem is there are holes within the economic system that are not being filled.”

He says the current system often seems to focus on professionals, such as doctors, lawyers and engineers but needs to be widened. 

“We need to look at people who have businesses and would like to move them here have business ideas and the skills to develop those ideas in Canada,” says Greg.