For Rich Thiessen, a focus on people has been at the heart of his career as a small business owner and this philosophy has shaped the culture and values of Silver Ridge Construction (1999) Ltd in Lethbridge.
“While I love construction, most of my joy comes from developing and managing people. For me it’s about surrounding myself with good people and giving them the tools to thrive. That’s a huge joy for me,” says Rich.
This belief in putting people first has been central to his retirement plan as well. It's motivated him to engage his employees in a succession plan that focused on long-term health and profitability, as well as his future financial health and that of his workers.
Becoming a business owner
After working at Silver Ridge as a manager of its agriculture and commercial division, Rich and his wife bought out the other partners in the company in 2004 with the help of Community Savings (which eventually amalgamated with other companies to become Servus Credit Union) and became sole owners.
“We work mostly with private developers,” says Rich. “We discovered that deals were falling apart because homes were being designed without thought to whether tenants would actually pay the price for those designs. We saw this as a gap and decided to address it by working closely with the design team and building owner to be sure there is a return on investing for proposed design elements before they’re incorporated. The owners know the price their tenants are willing to pay. The real estate industry loves our approach because they’re not spending time on deals that will never come to fruition.”
Silver Ridges niche approach to working primarily with private developers has paid off.
“We have lots of repeat customers, which is a good sign,” says Rich.
Thinking strategically about the future
In 2010, Silver Ridge was in a pivotal time of growth with exciting plans for the future. At the same time, Rich learned of three other companies that ended operations when their owners died.
“They just closed the doors and sold the building. I couldn’t believe it,” says Rich. “It became an incentive for me to think about how I would want to sell my business and retire. It occurred to me that if I sold the business before I retired, then staff would actually want to invest in it.”
In a strategic move, Rich struck a deal to sell 80% of his shares in the business to four of his staff. He and his wife retained the other 20%.
“They deserved it and I needed them,” says Rich. “We were growing and I welcomed the help to shoulder the load. I also wanted the business to be manageable if my kids ever decided to become involved. Twenty percent is manageable.”
Succession planning key to retirement
An Environics Research study has found that 42% of Canadian small business owners are unsure about their future and their plans for retirement while more than a third, or 36%, don’t plan to give up ownership until they are unable to manage their business. Servus Credit Union advises business owners to consider succession planning early. Not only does it safeguard the value of the business for future generations, it also establishes a clear process for the owner to step away from day-to-day operations and maximizes the exiting owner’s personal financial security into retirement.
While Rich is 56 and doesn’t plan to leave the company in the foreseeable future. He's found planning for his retirement early has led to some positive outcomes he hadn’t anticipated.
“As my staff realized they have a job if something happens to me, they started thinking bigger picture. Our customers also feel secure knowing it’s not just about me,” he says. “There are things we have done and risks we have taken that have paid off because my younger partners are wisely thinking ahead 10 to 15 years.”
For Rich, succession and retirement are tied together. “I wish for the company and all involved to succeed long after I am gone. I want to have a sense of success and pride in what I helped build. I also need the company to succeed so I'm paid for my remaining 20% of the company’s shares when I decide to retire.”
Tips for other business ownersRich has some advice for business owners who might be contemplating their succession and retirement plans:
- Put your pride aside and be prepared to work yourself out of a job. It’s about delegating and letting others share the load.
- Surround yourself with the right people. If you don’t have the right skill set in place, find it. If your existing employees have the potential, take the time to develop their skills.
- Make sure potential owners actually work in the company first. You want to be confident they’re making the right decisions long after you’ve retired.
- Rely on the experts – your financial institution, your accountant, your lawyer – to put the structures in place so the company will function the way you envision.
The benefits of planning ahead for retirement have paid off for Rich and Silver Ridge. The average retention rate for employees is 11 years, revenue has tripled in just six years and there are thoughts of expanding. Customers are assured there’s a plan in place for the long-term growth and health of the business. And Rich rests easier knowing employees are engaged and invested in the business now and will be long after he has moved on.