Recent growth rate: 195%

Head Office: Dartmouth, N.S.
President: Shawn Levangie

When Shawn Levangie told customers he had taken over the family business, they were surprised. Most thought Shawn was already in charge. Curtis Levangie launched Trail Blazer Products Ltd.,
a Dartmouth manufacturer of woods, lawn, and garden products, in 1987. He gave his son Shawn a management role in 1995, making him the “face” of the company. The 2007 transfer was a textbook example of succession in a family-run enterprise.

One of the most difficult tasks for any entrepreneur is to hand a business over to someone else, even a family member. “This isn’t just a business transaction,” says Leanne Hachey, the vice-president, Atlantic Canada, of the Canadian Federation of Independent Business (CFIB). “It’s giving up a way of life. It’s saying goodbye to a staff with whom you’ve built up an organization for 20 years.”

It’s also the most important financial transaction in an entrepreneur’s career. If the business is being sold to an outsider, it’s a chance for the owner to cash in on years of hard work and to retire securely. If the business is being handed over to a relative, it’s a chance to help an heir follow in the family footsteps. Done right, the entrepreneur’s life is fulfilled. The advice that follows can help ensure that it all goes smoothly.

The first rule of succession planning is vital: start early. The Levangie family implemented its plan over 12 years. It doesn’t always take that long, but a thorough succession usually takes several years. Julius Kiesekamp, a succession-planning expert at Pricewaterhouse Coopers, says the planning stage involves bringing the heir into the business and slowly allowing that person (or people, if there are more than one) to take on more power. “If you hang on for too long or you don’t let the new generation take over early enough,” says Kiesekamp, “they might not be able to handle those responsibilities when the time comes.” 

Unfortunately, most businesses don’t think along these lines. In a recent CFIB survey, 52% of respondents did not have a succession plan, even though 34% intended to exit their businesses within five years. Only 10% of respondents had prepared a formal plan. “When business owners do have a succession plan in place,” says Hachey, “the likelihood that the business will survive skyrockets.” (To help its members learn more about this topic, the CFIB has prepared a 40-page guide.)

So where to begin? The first decision is whether you will sell the business or hand it over to an heir. In many cases this decision is easy: your heirs have shown interest in taking over or have other career plans. If more than one child wants to step in, you’ll have to deal with the situation delicately. Experts say one brother or sister often emerges as the leader and natural heir, but there are cases where siblings can effectively run the business together. There is no simple rule; succession depends on the unique family dynamic. It’s essential, however, to establish and maintain open communication about the plan so everyone knows how it will unfold. Fail to do this, and both the family and business may suffer.

In fact, Kiesekamp says it’s a good idea for the founder to seek the advice of senior staff. What shape do they believe the succession should take, and which member of the next generation would make the best heir? “If the wrong person is selected, the staff will no doubt know,” he says, “and you could lose valuable employees.”

Sons and daughters must have the confidence and ability to take over the organization their parents spent a lifetime building. They must continue their parents’ dream, often by modernizing the company in a way their parents could not have imagined. If they fail to do so, they can lose more than just equity—they can also suffer the disappointment of their parents and the resentment of their siblings. “There is so much emotion in a business,” says Hachey. “Only someone who has sweated over it for so many years can understand it.”

After the broad outlines are established, you are ready to assemble a team of advisers. A lawyer is essential, because the transaction should be sound enough that no legal disputes arise. Also important is an accountant who specializes in succession, to help ensure that the business’s value doesn’t diminish through taxes. Some business owners also choose to consult a financial adviser or a broker, especially if they’re selling to an outsider. 

Next, the family should open the lines of communication and make sure that staff, customers, and suppliers know the long-term plan. This is especially important if the business is being taken over by a family member, because that relative will have likely spent years building relationships.

Working closely with an accountant and lawyer will help ensure that the family gets the most value from the transfer or sale. The one-time capital gains exemption of $750,000 is ideal for entrepreneurs surrendering control of their business. Another option is an estate freeze, an estate-planning technique that locks in the value of a person’s holding in a company to minimize capital gains at the time of death. The company issues new stock to the named beneficiaries, and these heirs take on the capital gains when the estate freeze is effected. There are also sector-specific provisions. For example, fishermen and farmers can use inter-generational rollover rules that allow them to transfer their business to the next generation on a tax-deferred basis. 

Shawn Levangie, now president of Trail Blazer Products, says the transfer of the business took place in the family lawyer’s office. Shawn still works with some of the advisers who helped ensure a smooth
transition, including Jim Copeland at Grant Thornton LLP and representatives of the Atlantic Canada Opportunities Agency and Royal Bank of Canada. Together they have continued to grow the company, which today reports just under $5 million in annual sales in 42 countries.

When the torch is passed to the next generation, the company founder usually remains involved in some capacity to ensure that there are no bumps down the road. This is the case at Trail Blazer Products; while Shawn runs daily operations, Curtis is the CEO and his wife, Joan, is controller. 

“I quickly learned after the transition the important role my mother has in the company,” says Shawn. “She handles the entire inventory and cash-flow issues, including meeting with banks and accountants.” He adds that he’s happy his father is never far from company headquarters. “Dad is the most supportive, unselfish person I have ever known, my strength both personally and professionally.”

Q&A with Shawn Levangie

What’s the most surprising fact on your CV?
Judging from my mom’s comments about me as a kid, I’m surprised about everything on my CV.

How do you achieve work/life balance?
Spending time with my family is just as important as a meeting with my largest customer. I make personal and professional commitments and stick to them .

How do you encourage your employees to do the same?
I encourage them to take care of their family commitments as well as their work. I don’t dig into their personal lives, but I do allow time for them to address it.

What’s your ideal workday?
Seeing orders ship out on time while spending the day having positive conversations with my customers and sales team (i.e. no complaints). This allows me to work on future products and markets and lets me go home to my family with nothing else on my mind but them.

How would you like to improve yourself?
Patience. I have to learn to work at a comfortable pace with others.

How would you like to improve the company?
Better communication, both internally and with our customers and suppliers.

What has been the biggest growth factor?
Our commitment to growth. I started calling dealers in the Yellow Pages in February of 1995. I haven’t stopped since. I’m committed to creating new products and new customers every year.

And the biggest obstacle?
I’ve discovered it takes time before employees develop and share the commitment toward Trail Blazer that I have. But I’m pleased to say that we now have a team that not only shares my commitment but is taking it to the next level.

On whom do you rely for advice for big business decisions?
My dad keeps me focused on the big picture; I used to consider it criticism. My mom is good with numbers and has a genuine concern for our success. Our consultants help manage growth and keep me focused on the bottom line. The management team brings bright new ideas that will contribute to growth.

On whom do you rely for advice for major life decisions?
My wife, Dawna. She really keeps me balanced (sometimes) and she guides me to make decisions that make me happy. My parents steer me in directions that best secures my family’s future.

What’s the next big move for the company?
Trail Blazer will develop a new brand, Snow Blazer, to launch a line of snow-removal products and keep sales up throughout the year. Right now we experience most of our sales in the spring.

What’s your next big personal move?
I don’t know. I’ll have to ask Dawna.