Mark Piekos, Executive Director MCEDC, joined the committee to discuss the update.
According to the National Center for Science and Engineering Statistics, over 50% of US business owners are aged 55 years or older. The next 10-15 years will see over 12 million businesses attempt a sale or merger. The intensity of the COVID-19 Pandemic caused owners to examine their long-term commitments and ability to weather economic uncertainty4. A 2023 study indicates the 88 percent of business owners had no written plan to transition from the current owner (this includes 66 percent who had no plan at all). This figure is consistent with other data, including a recent survey of family-owned firms.
An effort to educate entrepreneurs to sustain established businesses in McHenry County. The Strong Transitions Program is a two-pronged approach tailored to existing owners looking to develop a transition plan, and entrepreneurs who don’t yet own their own business.
- Transition Planning: Provide McHenry County business owners with guidance in putting their company in a position to sell or transition.
- Entrepreneurship Through Acquisition (ETA): Develop an 8-week, non-credit workshop providing guidance to prepare interested learners to buy an established company as well as operate, optimize, and grow it.
Made possible by funds from the Advance McHenry County Grant program, Strong Transitions is a partnership between the McHenry County Economic Development Corporation (MCEDC) and the Illinois Small Business Development Center (ISBDC). The program will provide business transition tools and training to allow McHenry County businesses to engage in meaningful succession planning initiatives.
While the transition planning program is aimed at existing business owners, the cascading impact on their employee base cannot be understated. If a transition plan is created for 88 employers, the risk of losing 2,000 jobs in our area will be reduced.
Additionally, a scholarship will be available to those interested in the ETA course. Based on current projections, ETA workshops will educate up to 340 individual entrepreneurs via non-credit training. The outcome will be a network of educated business buyers.
Transition Planning: The program will be available to any industry across the county. Businesses must fit the following criteria to participate:
McHenry County Owned, Established For-Profit entity, $300,000 or more in revenue
Must be planning a transition, succession or sale in the next 10 years
All applicants must become clients of the ISBDC via the client intake form and are eligible to receive additional advising services through the center.
Entrepreneurship Through Acquisition: This workshop is available to the public; however, a scholarship will be available to reduce the cost for the 8-week course from $1899 to $189 as an incentive. The scholarship application will gauge the applicant’s motivation, intention and ability to pursue a business acquisition.
Transition Planning: Strong Transitions partners will enlist the assistance of qualified business advisors. Business advisors will have experience in:
- Business Strategy
- Business Succession (family, employee and external acquisitions)
- Financial Forecasting
Advisors will deliver six 4-hour consulting sessions to participants. Sessions will be discreet, by way of a non-disclosure agreement signed by advisors. At the outset, participants will complete an Exit/Succession planning scorecard to determine their status. Outcomes will include an implementable transition plan and go-to-market strategy for the business. A participant survey will be conducted to measure business owner satisfaction and implementation of strategies. Success stories will be collected to promote future engagement of the program. Quarterly information sessions will be offered to participants. The information sessions will engage partners such as lenders, accountants, attorneys and estate planning professionals to share information about available programs and updates to popular acquisition lending opportunities.
Entrepreneurship Through Acquisition: This 8-week, interactive program teaches practical skills required to become an effective entrepreneur through the acquisition of an established business. It will feature exercises designed to help entrepreneurs complete their acquisitions. These include pitching to potential investors, prospecting for business acquisition opportunities, navigating seller relationships and negotiating bank loans. During the course, learners will have the opportunity to build their “Acquisition CV,” a document that details their qualifications. With learner consent, the CV will be uploaded to a shared database available to participants in the Transition Planning program. The database, or “match-making tool” will be available via the MCEDC and ISBDC website. Users will have the opportunity to approach the submitter of the CV for further discussion.
Transition Planning: Utilizing a reputable advertising partner, a collaborative ad campaign will be established and targeted to business owners of transitional age. Resource partners such as Manufacturing Pathways Consortium, MCC’s Workforce Training and local financial institutions will be engaged to market the program. It will be advertised on MCEDC’s website and through collaborative e-mail marketing.
Entrepreneurship Through Acquisition: This course will be marketed through the same channels, as well as in Workforce Training’s Catalyst Course Catalog. Business owners will be encouraged to send employees or family members who they’ve selected as candidates for succession through the course.
A Strong Transitions Education Event will be held prior to the launch of the program. This information session will be marketed to business owners who want to learn more about how best to prepare for a transition.
To enhance the efficiency and sustainability of the program, a Strong Transitions Steering Committee will be established. This committee will consist of community business leaders, industry professionals, educational partners and representatives from MCEDC/ISBDC. The committee will meet quarterly and review outcomes and accountability. The Steering Committee will select Strong Transitions Stewards, individuals responsible for promoting the program to their peer network and community organizations such as Chambers of Commerce, Rotaries and Business Groups. A train the trainer educational event will be held for the Steering Committee and Transition Stewards. This will enhance the knowledge base of the groups and provide a foundation to promote the program in the business community.
Upon completion of the Advance McHenry County Grant period, the partnership will continue to offer business transition advising services. Future costs will be offset by program fees collected during the grant period, and the expense to the participant will increase to market rate. The Entrepreneurship Through Acquisition class will become a staple of Workforce Training’s Catalyst catalogue, delivered at a cost to the learner. A future collaboration with the MBA programs offered at MCC’s University Center will be developed.