Sloan Partners

Off The Books With Greg McRae: On Success and Succession Planning

Tell us a little bit about yourself and what you do here at Sloan Partners?

My role at Sloan Partners is to service my clients’ needs and help them professionally. Before joining Sloan, I worked at KPMG, mostly with private companies and non-profit organizations (NPO’s). My clients included companies of various sizes, from $1 million businesses to companies with hundreds of millions in annual revenues. I have also worked with many different types of NPO’s such as colleges, universities, and large charities. I have been active in the past serving on various NPO boards and in that capacity was the treasurer for the Canadian Association for Co-operative Education and a member of the finance committee for the Ontario Neurotrauma Foundation. I was able to assist those organizations with various financial matters and lend my knowledge of the sector to them.
Outside of work, I enjoy golf and curling, which works out nicely because when one season ends, the other starts. I also enjoy spending time with my two kids and I’ve recently started to do a bit of wine collecting as well.

What makes a successful entrepreneur?

Most successful entrepreneurs that I’ve seen are very driven. They know their business inside and out and they focus relentlessly on their key drivers, whether it’s sales growth or maintaining their margins, or whatever the case may be specific to their own business. As a business leader, you shouldn’t spend your time dealing with the day-to-day details, you should be driving the business and leading your team. Entrepreneurs need to hire good people and let them do their work. A good leader really shapes how an organization works and functions. An environment that allows for innovation and open discussion is often a very successful one.

What other advice do you have for entrepreneurs?

I say it all the time – “Hire a good accountant and a good lawyer, and listen to their advice.” Pretty simple really, but you’d be surprised at how many people don’t do it. This is especially important if the business is young or the owner does not have a lot of expertise in these fields. At Sloan Partners, we’re not just accountants or auditors, we’re business advisors. My client’s call on me for advice and my job is to be their trusted advisor. You know you have gained their trust when they are comfortable calling you at any time to discuss any issue that they are dealing with, not just tax or accounting matters. While taxes are often one of their main priorities, they often rely on us for our views on business issues and the economy in general.

What advice do you recommend for succession planning for business owners?

You have to have an exit strategy and think about what would happen if you need to hand your business over suddenly or if you are planning for your retirement in the next 5 to 10 years. One of the biggest problems with trying to get yourself out of a particular business is not having a plan. You should be planning three or more years in advance of a sale or pending retirement in order to have everything prepared for your exit strategy. Often, one of the key issues in a sale or transfer of ownership is transferring the relationships that the owner has with customers, suppliers and the management team. It is often a critical element when the owner of these relationships is considering exiting the business. It takes time to effectively transfer these relationships and is usually very difficult, so it needs to be planned far in advance.

Business owners often try to keep the business within the family, but a lot of these fail for various reasons including the relationship issues previously mentioned, or the potential lack of skills of the incoming leader. Some of these issues can be addressed if properly planned for but the entrepreneur needs to assess the ideal strategy from the 30,000 foot level and determine the best course of action for all involved.

When should an exit strategy be employed?

An exit strategy is often driven by the age of the entrepreneur and the goals he or she has with the business in the future. Most businesses follow a lifecycle – Growth, Sustainability, and finally, Decline. There are very few companies that can innovate and avoid completing the lifecycle. The entrepreneur may enjoy the nature of the business, the relationships they have forged and the income that the business is providing. One should always be looking forward and thinking about what the future success of the business will be and when it might have maximum value and then consider that with the goals of the individual and his or her family. By having this long term view with an ultimate goal of an exit strategy in the back of their mind, the entrepreneur can make the appropriate long term decisions about when an exit strategy is appropriate and which direction it should take.

You also work heavily advising non-profit organizations and have served on some boards. How is that different from working with for-profit organizations?

It’s different for an NPO because difficulties are usually operational or there’s not enough funding, so the culture is very important. It’s not about selling a product or making money, the focus is on your mandate.

NPOs often do well at carrying out their objectives, but they don’t always have the same financial expertise available. They are often run by well qualified directors and team leaders who drive the organization and its overall success. Culture in an organization is one thing that permeates throughout meetings and everyday activities, so you have to foster a positive culture and environment.

What part of your job do you find most rewarding?

No question, it’s working with the business owners and management teams. Getting to know them and their families, and learning about their long term goals and objectives is very rewarding to me as a professional. It’s all about the relationships; any accountant should tell you that. That’s what makes any business successful, and it’s also the most interesting and rewarding part. It’s rewarding knowing that they trust in you to help them make their business successful.

Is there a part of your job that people may find surprising?

Most people think that being an accountant is solely about dealing with numbers. While we look at numbers and financial statements all the time, there’s so much more to it. Just from reading financial statements, I can learn a lot about a business. I can usually figure out a bit of their story on my own and then when I talk to them or become their advisor, I can delve in and ask questions and get to know their story better. Each business is unique in that sense and the numbers help to tell the story but there are often many other issues affecting the business which need to be discovered. That is not number crunching necessarily – business is more about relationships.


Greg McRae, CA, CPA, is an Associate Partner with Sloan Partners. Before joining Sloan Partners, he worked at KPMG Enterprise for 25 years advising private companies and non-profit organizations. His clients have included a number of Ontario colleges and universities, charities, NPO’s and numerous private companies run by entrepreneurs. He has also served on the boards of the Canadian Association for Co-operative Education and the Ontario Neurotrauma Foundation.

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