Richard: Take the time to reassure, inform people, to diagnose, to make decisions, but gradually, in a certain sequence.

Caroline: In fact, my approach was very simple. I actually sat down with them and took the time to listen to them.

Katerine-Lune: Hello, this is Katerine-Lune Rollet. You're listening to Libres échanges, a Desjardins Business podcast where I look at various themes related to entrepreneurship. In this 8th episode, I talk about business succession with 2 guests. Happy listening! When you take over a business, the process is very similar to an acquisition. There's the financing phase, the negotiations, the transaction and the transition. But taking over an existing business also means inheriting an organization with a well-established culture, employees and processes. And that's why the human behind the transaction is of paramount importance. To get a clearer understanding of the subject, I'm discussing it with Caroline Brunelle, CEO of Pénéga Communication, and Richard Quinn, Director, Business Transfer at Desjardins Business. Hello, both of you.

Richard: Hello.

Caroline: Hello.

Katerine-Lune: First, Caroline, tell us about your company's services.

Caroline: Yes, absolutely. In fact, Pénéga is a boutique agency. We're doing a bit of the traditional and digital 360 marketing today. We can support people in terms of their brand identity and promotion, but we also do more custom application development for websites or operational portals, for example.

Katerine-Lune: Richard, you've specialized in business transfers for 16 years, including 10 years at Desjardins. Can you tell us a little more about your role?

Richard: In fact, I lead a team of about 10 people who support our network of account managers who deal with clients for business transfers. We sometimes support clients directly, sometimes through our account manager. We developed a process with a few steps, four steps, in fact. That allows us to present these steps to our clients. Lastly, guide them through this process and through our profession: financial planning, legal and tax advice, and transaction financing, of course. We act as experts in these specialties and as a guide in the others.

Katerine-Lune: Richard, we had a previous episode on business acquisition. How is business succession different?

Richard: Business succession, in its broad sense, is in fact a transaction between a successor and a transferor. There's a desire to ensure the company's continuation; it's a common desire. We really see that in all cases. But like an acquisition, there's also a transfer of management and a transfer of ownership.

Katerine-Lune: And what are the different types of business succession possible?

Richard: Obviously, there's internal succession. So, the employees. I'd say this is the most common form, the one we see most often. There's, of course, the family transfer, so family succession. There are quite a few family transfers as well. The economic fabric in Quebec is a lot of family businesses. Then there are the external buyers, those with expertise, who decide to buy a business, so integration. These are the 3 main forms, I'd say, that are used.

Katerine-Lune: You, Caroline, you're an external successor at Pénéga. Can you tell us how it happened?

Caroline: I think it was primarily a market opportunity that arose for this transaction. The former owners of the agency wanted to retire. We already knew each other because I was initially a client at Pénéga. I was fairly familiar with the agency's service offer, for example. After discussions, they put on the table the fact that they wanted to make a transition. We talked several times. There was a long period of negotiations. Then we reached the agreement that led us to formalize the transaction.

Katerine-Lune: And before that, you worked at a financial institution. What made you want to be an entrepreneur?

Caroline: I've always functioned in an entrepreneurial or intrapreneurial context. My grandparents, in fact, were involved in entrepreneurship. I've always been immersed in an environment where families were involved to some extent in this method of operating. I actually had the confidence to say, I think I can do something with a company. Jumping in when you're alone in this, you, of course, have little doubts and all that. But things were such that I had a good foundation. I also had good training in my former job, which was slightly more intrapreneurial in nature. So, I'm sure it was as if it were a small SME within a large corporate entity. So, having had the opportunity to experience pretty much every area of activity involved in managing a business sector, I already had a good foundation to take over a business.

Katerine-Lune: So, let's talk about the steps to take. Richard, would you describe them to us?

Richard: Of course, you have to find one. The first thing is to define a target. Build trust with the sellers to obtain information, learn about the company itself. For example, the financial statements, the profile of the company, sometimes client lists, etc. to learn how to properly understand this company. You have to determine a price, prepare a letter of intent. It's about showing interest, a price paid, various conditions. There's a negotiating period. Caroline would certainly be able to talk about that. Often a period of negotiation with ups and downs. It's always like that, more or less. Finally, when the letter of intent is accepted, the entire process begins. For example, due diligence, putting together the financing. It's always pretty rigorous. There's a lot of work to do in that regard.

Katerine-Lune: Caroline, tell us about your relationship with Richard. How did he support you? And did you call on other professionals?

Caroline: It was something of a search for the best team of experts. And Richard's team gave me confidence. It was, I think, really selecting a team that you're comfortable with, that really understands your reality, that knows you at least a little bit too. After that, it's definitely a monetary offer, so it's also a decision that includes a bit of rationality. I think it's important to be with people you can talk with, who also understand the reality of the transaction. Negotiations have their ups and downs, to be sure. It's important to have the right people around you when there are downs.

Katerine-Lune: And who was there with you in those down times?

Caroline: There are the people who were with us financially. There was an account manager on Richard's team, who was, among other things... who was there to validate the assumptions, answer questions of a slightly more financial nature or just align the transaction. Because when you're more or less comfortable, there's a difference between hearing about a business-takeover transaction and experiencing it. They're legal documents and subject to interpretation,so you want everything to be clear and transparent. For my part, I also had a tax specialist who helped me with everything tax related in the transaction.

Katerine-Lune: Richard, in all these steps, are there any warning signs to watch for?

Richard: One of the warning signs is paying too much, then financing too much of it with little flexibility in the financing package. For me, it puts a lot of stress on the team and the entrepreneur as such. We were able with Caroline, her way of negotiating, she listened to us, too, I think, quite a bit. We found a good balance in her transaction. It made me feel a little more secure for her. In fact, one thing we don't want is to create problems for our successor, in the end. That's a big part of our goal. The warning sign, the price. I'd say, the relations between the individuals, that's a warning sign you have to watch for all the time. Because, at the end of the day, it's a transaction between people. That aspect is very important. Of course, the financial aspect, properly securing the transaction.

Katerine-Lune: What are the biggest challenges successors can face?

Richard: If things don't go as planned after the transaction. For example, losing a client, it happens. Conditions changing with a client, those are things we see. Same thing with suppliers —suppliers that had special conditions for the company and suddenly decide to renegotiate those conditions, that could have a significant impact on cash flow, for example. Or the departure of a key employee or group of key employees. People who thought they'd be named as the business successors, that happens often. They're unhappy after the transaction. Obviously, that can hurt a team when it happens like that.

Katerine-Lune: Caroline, did you encounter challenges you weren't prepared for?

Caroline: Not particularly. I think the fact that I actually spent a few months before the transaction inside the company, I had a good read, I think, on what was happening, the actions I was going to have to take to optimize and operationalize the change in culture, and potentially also the operational management, which is different today. But I didn't have any big revelations following the transaction, because of that.

Katerine-Lune: Let's talk about the negotiation process. How did it go for you?

Caroline: It was very emotional for the sellers. It's a company that had been in business for 25 years. It meant a comfortable retirement for them. It's something that's emotional and not rational. Whereas for me, it was a calculation, it was financial. Yes, there's everything you want to do with it, and the addition and all that, but when you're really at the point of signing the contract, that's not where your head is at. You're really thinking about: How much does it cost? What will I get? What's my interest rate? What's my profitability in this? You're thinking about the unexciting things, but that's the way it is.

Katerine-Lune: Richard, is Caroline's case unique or is it often like that?

Richard: It's very often like that. We're still in a generation of founders. These are first-generation transfers, and those builders, who spent 30 to 40 years building a business, they have that attachment. It's true that sometimes they see their business as much more valuable than its actual market value. And sometimes it's the other way around. It happens very often. But the emotional context is always about the same. It takes a strategy, an approach. I think Caroline was nevertheless quite patient. She took her time. And I'd say it's the right thing to do. People have to move at their own speed. You also have to adapt to the situation.

Katerine-Lune: Do you have any advice to ensure a smooth transition?

Richard: It's about identifying the leaders. The leaders, often informal, inside the company. You have to make allies of them. There are always people you have the most affinity with, are closer to, who listen to you, but who have an aura inside the company. It's very important to identify them.

Katerine-Lune: So, Caroline, tell us about your relationship with the employees. How did you position yourself as the new owner?

Caroline: In fact, my approach was very simple. I actually sat down with them and took the time to listen to them. After that, we held team meetings, and I immediately wanted to get a concrete idea of what was happening, what their daily experience was like. Of course, by seeking their support and involving them in this change, it was much easier for me to convey certain messages or just explain the vision to them: What are our objectives? What are we doing, starting today? Also reassure them because a business transfer and a change in management can often mean layoffs, major changes or massive restructuring. That really wasn't the goal. My goal in taking over Pénéga was to maintain the company's good momentum. So, the idea was to capitalize on the existing strengths and then say: Nothing in life is perfect after all. From that point on, what aspects should we improve? Then we'll deal with them one by one, and we'll get through it together.

Katerine-Lune: Richard, for a business succession that involves a plant or a company that sells merchandise, are there different steps?

Richard: In fact, it's the same or almost the same. It may be the profile of the individuals that's a little different. A transaction involves humans, so there are employees, partners in the business, customers, suppliers. All of those people are affected by the transaction itself. Take the time to reassure, inform people, to diagnose, to make decisions, but gradually, in a certain sequence. In every transaction, it has to be done that way. In fact, there's not really much of a difference, except for a communications firm, they are creative people. Yes, of course, there are a lot of emotions, but at the end of the day, they are still people; it's the same from one transfer to the next.

Katerine-Lune: Caroline, what would the qualities of a good entrepreneur be?

Caroline: Well, empathy, as I said earlier. Putting myself in my people's shoes and being there to facilitate their daily lives is certainly part of my way of seeing and managing things. My job is to make theirs easier. So, I try to do my best to make things flow and ensure they have the environment to be able to work. Then there's organization, especially in entrepreneurship. There are so many things that have to be managed that you don't necessarily see when you're in a corporate setting, because there's so much that the big machine manages for you. Even if you have a good background, sometimes there are little surprises with small operational things that happen in your daily activities. Also, I think that if, in fact, that type of machine there functions well, it makes it so there's less pressure on daily life. It allows more time to work on the things that have added value.

Katerine-Lune: And how did you help organize the company better?

Caroline: Organization is a good point. Having just arrived and all that, you have a fresh perspective on the activities. Of course, I also made some observations. Based on my past experience, there were some things that needed to be optimized to get the machine running better. And then there were new tools that were developed. When you're too close to the company, I think there may be questions you don't necessarily ask because things are working, it's rolling along, you're managing to be very successful and all that. Why would you systematically question things you've been doing for x number of years? It allowed me to make certain changes to optimize things, streamline certain operations, and save time on anything done manually. I think that, too, is a context in which no matter what industry you're in, there's a shift currently under way on what was being done manually, systematically and all that. Can we automate things? So, both small SMEs and large corporations can benefit, I think, from those little tweaks, there.

Katerine-Lune: Richard, what do you think makes a good entrepreneur?

Richard: I'd say that all good entrepreneurs have that quality, the human qualities of listening to people. An ability to get people to work together. It's often called leadership. It's hard to define, but people have it inside them and they have a vision, they're able to communicate it. People want to follow you. It takes that. Of course, it takes a knowledge of management. It takes experience, you have to have some experience. Have the right people around you to do your transaction and also afterwards. The real work begins the day you acquire it. You don't want to buy it to keep it the way it is. You want to develop it and put your stamp on it. It takes people who have ideas, who want to execute them, implement them. A good entrepreneur is someone who's dynamic. At the end of the day, an entrepreneur has human qualities, but also dynamic ones, has a vision, is actively involved, basically, carries people along with him or her.

Katerine-Lune: When you look at a file, Richard, and you see that someone has had professional failures, is that a plus for you?

Richard: Yes, it can be a plus. If people got back up, for me, they're people of character. That's what it takes to be an entrepreneur. You have to be able to cope with adversity. Those are things that I really look at in the individual's track record. That's something I want to know more about. How did it happen? How did you get back up? Who helped you? Who did you have around you? For me, it allows me to see if the person will be able to repeat those kinds of behaviours if there's a problem, some kind of setback. The loss of a client, for example, or key employees, how that person will recover from that failure or setback, basically.

Katerine-Lune: In short, we can see how much the success of the business succession depends on the human qualities of the person behind the transaction. Regardless, Pénéga's employees are very lucky to have a leader like you, Caroline, someone so empathetic and attentive.

Caroline: Thank you very much.

Katerine-Lune: Caroline Brunelle, Richard Quinn, thank you very much for participating in Libres échanges.

Richard: Thank you very much.

Caroline: Thank you.

Katerine-Lune: Libres échanges is presented by Desjardins Business. You can find all the episodes in the series on Spotify. My name is Katerine-Lune Rollet. Thank you for listening.

Yanick: With the current shortage of workers, acquisitions are becoming interesting as much in terms of human resources as material resources.

Maude: It's indeed important to clearly identify the targets. This is often the result of a reflection exercise by the CEO in collaboration with the advisory committee.

Mathieu: However, by always referring to the strategy, we remembered the importance of the transaction and disregarded the irritants that had less of an impact on the final result.

Katerine-Lune: Hello, this is Katerine-Lune Rollet. You're listening to Libres échanges, a Desjardins Business podcast where I look at various themes related to entrepreneurship. Today, I meet with 3 guests to talk about the process of acquiring a business. Happy listening! Whether it's to buy a competitor, conquer other markets or increase production, acquiring a business requires meticulous preparation. To discuss this complex process, I'm speaking with 3 guests who know all about it: Mathieu Ouellet, CEO of Ressorts Liberté, which acquired a business in 2021, as well as 2 stakeholders at Desjardins Capital, Yanick Dionne, Investment Manager, and Maude Lemieux, Vice President, Investment. Together, we look at the things to consider before, during and after an acquisition. Hello, all three of you.

Mathieu: Hello.

Yanick: Hello.

Maude: Hello.

Katerine-Lune: So, Mathieu, maybe we can start with you. What is Ressorts Liberté?

Mathieu: Ressorts Liberté is one of the largest spring manufacturing companies in North America. We manufacture springs mainly for automobiles, but also for recreational vehicles. We sometimes say, just for the pleasure of saying it, that one in two cars in the world has a Ressorts Liberté spring.

Katerine-Lune: We also have Yanick and Maude, who work at Desjardins Capital. Can each of you tell me a little about your role? Maude, can we start with you?

Maude: I have the pleasure of working with a group of professionals, investment managers like my colleague Yanick, who, in their daily activities, support entrepreneurs in their growth and business transfer projects.

Katerine-Lune: Yanick.

Yanick: Hello. I'm an Investment Manager for the South Shore region of Quebec City. I look after equity or unsecured debt financing for SMEs in the region. My relationship with Mathieu Ouellet dates back to spring 2019, when we collaborated on Ressorts Liberté's first transaction.

Katerine-Lune: Mathieu, let's talk about the acquisition you made in 2021, it was Elka Suspension. Why did you choose that company?

Mathieu: We'd been keeping an eye on Elka Suspension for some time, because strategically, for us, it was interesting to expand our product portfolio a bit. Also, for the introduction of a new product we plan to launch on the market in 2022, it was a good platform for us to launch that product. We'd already started looking at the company in 2019. We identified it as a potential acquisition. And it was only in 2021 that we finally got the news they might be interested in talking with us.

Katerine-Lune: Yanick, what are the elements to consider when buying a business? Are there selection criteria that help us decide on one company over another?

Yanick: It's important to establish, from the outset, what our acquisition targets are. Not necessarily to have the target names, but more the key elements. Maintain 4 or 5 very specific target objectives. For example, geographically, where should they be located? Are we targeting a specific number of employees, a specific product, a specific technology? So, it's good to establish the first criteria when considering a target.

Katerine-Lune: As I understand it, companies often have a very specific objective in mind when deciding on an acquisition. Might it be to fill their gaps?

Yanick: In fact, it's often a question of diversification. It's also a question of increasing the workforce. With the current shortage of workers, acquisitions are becoming interesting as much in terms of human resources as material resources. Essentially, there are many reasons to make an acquisition, but diversification is probably the most important.

Katerine-Lune: Maude, tell us about the main steps before acquiring a business

Maude: To follow up on Yanick's comment, I think it's indeed important to clearly identify the targets. This is often the result of a reflection exercise by the CEO in collaboration with the advisory committee or board of directors. With respect to the company's strategic plan, towards what do they want to grow, but also the issues or the risk elements that governance also likes to have on the radar. Do I have risks anywhere? Should I make an acquisition that would mitigate these risks somewhat? So, there's a lot of thought to be given to the type of acquisition we should target and preparing well. Because once it has been identified and we want to prepare for this acquisition, of course, I think everything needs to be planned, and more. Because even if we plan for everything, there are things that will happen.

Katerine-Lune: And you, Mathieu, how did you plan your acquisition?

Mathieu: We established a strategic plan in 2017, which opened the period from 2017 to 2024. We got together with Desjardins Capital and Investissement Québec. They were kind enough to give us the choice of different candidates for the board of directors. That's to say, we went looking for people with experience that could support us in various aspects. We had people experienced in R&D, in introducing products to the market. We had people more experienced in acquisition, pre-acquisition, people more experienced in post-acquisition and with various other kinds of experience. When we first presented Elka Suspension as a possible acquisition in 2019, we had already begun discussions with them. When the time came for the acquisition in 2021, there weren't too many surprises, and they were ready to support us in the process to successfully complete this acquisition.

Katerine-Lune: And Maude, for the sellers, is there also some tax preparation that must be made in advance before even declaring or announcing that the business is for sale?

Maude: There's a lot of preparation to do for a company president who wants to sell his main asset, which often represents his entire pension fund. There has to be a reflection process that must begin a few years before. Thought must be given to the kind of sale or exit from the business desired. Will he want to transfer it to key employees? Are those key employees ready? Has it been discussed with them? Ultimately, is it better, for various reasons, to sell instead? So, I'd say, for him, first and foremost, preparing personally to sell because, as a human, he has some fairly important preparation to do. But also preparing his successor and management team for an eventual transaction.

Katerine-Lune: Mathieu, who assisted you with the process during the acquisition?

Mathieu: We chose a firm called DNA Capital. With them, we were able to get the help we wanted for the pre-offer and due diligence parts.

Katerine-Lune: Yanick, can you tell us about the due diligence process? What does it entail? Is it a bit like inspecting a house before buying it?

Yanick: Yes, that's a good analogy. In fact, there are several steps in due diligence. We go through almost every department of the company, including its human resources, management team, operational efficiency, purchases, customers, suppliers, and profitability, and the tax and legal aspects of the corporation. This is where we can sometimes discover skeletons in closets, and then we decide to step back. Or, in the end, we're able to live with the flaw and decide that the company is still good, that the target is still attractive.

Katerine-Lune: Can this step also allow us to negotiate a different price than what we'd anticipated?

Yanick: In fact, due diligence regularly raises questions that will lead us to renegotiate certain terms of the purchase with respect to both the price and the payment method.

Katerine-Lune: During the negotiation process, there's the question of price, but there are also other factors to be considered. Mathieu, you had a card to play that really made a difference for Elka.

Mathieu: The fact of being 2 Quebec businesses certainly had an impact on the result. I think it was important for us to have a culture close to ours, but also for Elka Suspension and its 3 founders, Martin, Jean-François and Marc-André. For them, it was also important to have a culture that would ensure the change didn't have an impact on their teams.

Katerine-Lune: Maude, what could prevent a transaction from going through?

Maude: If we discover, for example, business models that make the company more dependent on a supplier than we perhaps thought and we don't feel we can secure this key supplier in the transaction. This could mean that, despite all the money invested, the business model would no longer be sustainable. To discover that maybe some synergies aren't there as much. We discover things we need to review because the return we think we'll make on this investment won't be as significant. So, we revise downward, and, at that point, the business seller says: I'm going to abort the transaction and wait for another time.

Katerine-Lune: What exactly is synergy, Maude?

Maude: Synergy is what the company identifies as a potential gain. A gain can take the form of simply eliminating a lease, selling a building because it will be able to relocate or restructure its plants. It can also be a consolidation in terms of purchasing raw material, which will allow it to obtain volume discounts. It's really a gain that comes from an acquisition transaction.

Katerine-Lune: I imagine that the seller and buyer must go through a whole range of emotions during the acquisition process, but that the most stressful step is probably the negotiations. I'd be really curious to hear what all three of you have to say about this. Mathieu, let's start with you.

Mathieu: I have to say that in our case, the negotiations were still quite easy because the culture of both companies was fairly similar. It went well, I'd say, but there are definitely times when you have doubts. But players like DNA Capital, Desjardins and Investissement Québec, that have seen other transactions, are there to temper things and get us to see the essence of the transaction.

Katerine-Lune: Yanick?

Yanick: I think the most stressful part is often determining what we want to obtain when the transaction closes. Because often we have a target closing date. We always try to respect it, but it's sometimes difficult. However, the buyers and sellers really need to agree on how they'll deliver the company's balance sheet at the closing date. What kind of debt level is expected? What amount of working capital is expected? And those are often somewhat touchy elements for the seller because the seller wants to gain as much as possible from the acquisition. These are last-minute elements that are often negotiated in the last 2 or 3 days prior to the closing with the lawyers. So, it creates a certain amount of stress.

Katerine-Lune: Maude, how do we manage the stress that comes with an acquisition?

Maude: During the due diligence, on day X, they discover something that wasn't necessarily in line with expectations. Of course, when the due diligence team—sometimes there are even employees of the company dedicated to doing due diligence—discovers these things. I think we also play that role, a bit, as external investors. There's that stepping back. It's about putting into perspective what we wanted with this acquisition. What issues were we trying to mitigate? What did it give us in terms of our strategic plan and growth? Return to neutral and say: Look, there's this aspect we don't really like. We keep it in our sights. It can be mitigated, eventually, in some way. We're going to build synergies. It can be what I call a dissynergy, that is, a cost rather than a synergy that we discover. We will weigh the pros and cons and put it in our follow-up plan.

Katerine-Lune: Mathieu, were there issues you didn't think of at the beginning that made you experience a roller coaster?

Mathieu: Yes, indeed. In the negotiation process, there were, of course, times when we had concerns about various elements discovered during the due diligence. However, by always referring to the strategy, we remembered the importance of the transaction and disregarded the irritants that had less of an impact on the final result.

Katerine-Lune: Are there any important elements to remember to include during the negotiations?

Maude: I think it's important to ensure that our management team, the key employees, will remain in the company we acquire, especially if they're part of the strategic synergies. Lately, we're seeing more acquisitions to allow our growing businesses to actually meet their manufacturing needs. They're acquiring other businesses because they have a fairly large order book and lack production capacity. Capacity, sometimes not necessarily in terms of machines, but employees. So, it's important to determine during the process how we want to do that integration. Make sure that those employees will stay with us afterwards and be as transparent as possible in our negotiations on that aspect.

Katerine-Lune: Mathieu, what elements do you put in place to ensure a smooth transition?

Mathieu: Even prior to the conclusion of the negotiations with the sellers, we established a transition process that took place over several months, years, depending on the steps, so as to properly cover the transfer of responsibility on certain subjects, to properly cover the risks that were identified during the due diligence. All of these actions were taken to help us stick to the transition process after the transaction.

Katerine-Lune: Yanick, once the transaction is accepted, what are the next steps?

Yanick: In fact, we have to see if the plan is being followed. We need to see the collaboration between the sellers and the buyers and if everything is going well. Make sure the employees remain happy, that there are no job losses. Monitoring the plan is important, monitoring everyone's collaboration, the involvement of the right people. Make sure we maintain good relationships with our customers and suppliers. That they''re not stressed by the fact there's a new owner. The human element is very important.

Katerine-Lune: Maude, finally, there are new owners coming in. How do we ensure that the corporate culture, the transition from one type of management to another goes well?

Maude: I think that can be an exercise done a bit in advance. Survey our employees, at our own plant, on their perception of management to be able to correlate or find gaps and address them beforehand. There are very different leadership styles. Sometimes, there can be a buyer and a seller who get along very well. They think there is a natural fit, but their leadership style and the way they were with their respective employees is different. It's important to be sure of that and address it. Not be afraid to adequately communicate and address these elements, listen to what they have to say, I think it's essential.

Katerine-Lune: In conclusion, do you have any advice for people wanting to sell or buy a business? Let's start with you, Maude.

Maude: It's important to start with good strategic planning. Identify where there are risks in our business model. How we can mitigate them with an acquisition. Or, if our goal is strong growth, target an acquisition that would meet our growth objectives.

Katerine-Lune: Yanick?

Yanick: Surround ourselves with the right people. Find the right professionals to help us. Don't be afraid to talk with our partners, discuss the successes and mistakes with our board of directors, be very transparent. And to mention that it's a team decision, we're doing it to ensure the company's health. Don't fall in love too fast. Sometimes, take a step back to better assess the situation.

Katerine-Lune: Mathieu?

Mathieu: When we get to the final negotiations, to remember that we're all human. We want to be successful; we want to help our teams at the same time. At the end of the day, it's two or more people agreeing on an adventure they're going to start together.

Katerine-Lune: Ah, that's wonderful, what you're saying! It's true that, in a way, acquisition is a form of union. The clearer our expectations are, the better it is for the future. Mathieu Ouellet, Yanick Dionne and Maude Lemieux, thank you very much for participating in Libres échanges.

Maude: Thank you.

Mathieu: Thank you, Katerine-Lune.

Yanick: Thank you.

Katerine-Lune: Libres échanges is presented by Desjardins Business. You can find all the episodes in the series on Spotify. My name is Katerine-Lune Rollet. Thank you for listening.

Frédéric: My business exploded. We saw a sixfold increase in sales from June to September.

Bernard: Plan, it can't be said enough, plan. Plan for sufficient resources—human resources, financial resources, equipment…

Stéphane: It's all well and good to turn a $5 million profit at year's end, but if that $5 million is in inventory on the shelves, it's not in the bank.

Katerine-Lune: Hi, this is Katerine-Lune Rollet. You're listening to Libres échanges, a Desjardins Business podcast where I discuss topics related to entrepreneurship.

Today I'll be speaking with 3 guests about running a business experiencing exponential growth. Happy listening.

When your business is expanding by leaps and bounds, it's important to have the tools to maintain healthy expansion. So how do you plan properly through these phases of growth? That's the focus of my conversation with Frédéric Soucy, President of Soucy Industriel, Bernard Sozio, Account Manager, Business Development, and Stéphane Pageau, Vice-President, Major Accounts at Desjardins Business.

Good morning to the three of you.

Man: Hello.

Man 2: Hello.

Man 3: Hello.

Katerine-Lune: Frédéric Soucy, you're the president of Soucy Industriel, a fourth-generation family business in Rivière-du-Loup with more than 250 employees. In the last 10 years, you've doubled your turnover 3 times over. In your case, we can really talk about exponential growth.

Is it your company's role to be there when there are mechanical issues at a big construction site or in a mine?

Frédéric: Yes, that's us in a nutshell! Our job is to show up with solutions to problems that meet the needs of customers in a variety of industries. Production equipment at primary contractors in Quebec and Eastern Canada is often massive in size. You can't just take it apart and ship it back to the factory for repairs. For us, that means deploying teams throughout Eastern Canada.

It's not just a question of showing up, deploying resources and workers and doing the work. It's about taking the time to identify the optimal solution that will limit production stoppages for the customer.

Katerine-Lune: Bernard Sozio, you are Account Manager, Business Development, at Desjardins Business - Bas-Saint-Laurent. You're also the account manager for Soucy Industriel. How do you help Frédéric with his business?

Bernard: Soucy Industriel is expanding in different sectors and taking advantage, as Frédéric said, of all kinds of opportunities. But it's also a company that makes acquisitions and develops new customers and technologies. This generates different needs. It has to mobilize resources, acquire workers, mobilize the workforce.

Soucy's growth also involves breaking into markets that are new to the company, often with different payment terms. So, it's important to know the company's business model so we can try to meet its needs as best we can with our financial products, and help it grow within their operations.

Katerine-Lune: Stéphane Pageau, you are Vice-President, Major Accounts, Eastern Quebec at Desjardins Business. What is a major account?

Stéphane: Major accounts are companies with higher-than-average financing needs, but also greater need for things like international services, different banking services. We're a bit like a continuation of the Desjardins Business Centres to better support members who are growing.

Katerine-Lune: Bernard, can you tell us how exponential business growth is defined?

Bernard: In most cases, mature companies grow in line with inflation. Usually we're talking a growth rate of around 5% or 10%. But when a company is seeing 15%, 20% of 25% percent annual growth, we talk about exponential growth. That means sales can easily double or even triple over a 5-year period. This generates needs that are also exponential, especially in the short term, and impact the organization, especially the company structure. These are challenges.

The company has to adjust to these new environments on a daily basis because today's reality is not the same as it was 2 years ago. So, it takes experienced managers at the company level and also support in terms of financial products.

Katerine-Lune: And you, Stéphane, how do you define exponential growth?

Stéphane: It's like taking a sailboat across the Atlantic. That's kind of what being an entrepreneur is all about. And when I hear the word exponential, I immediately see 60-foot waves in my head instead of a long, calm river. So that's the difference.

Katerine-Lune: But are there differences between types of growth? I’m thinking of growth by acquisition versus organic growth, for example. And are the challenges the same, regardless of the type of growth?

Stéphane: With acquisitions, the challenge is more about synergies, business model consistency, paying the right price, and integrating new resources. With internal growth or new product development, it's more about equipment, fixed assets, human resources, and so on.

Katerine-Lune: Frédéric, your company is celebrating its 90th anniversary this year. You, you've been the president since 2000, but it was in 2010 that things really started to explode, especially in 2013, when you saw sales increase 6 times in 3 months. I think we can safely call that exponential growth. How did it happen?

Frédéric: Our biggest customer, ArcelorMittal, was starting up a new production line they had just built at Mount Wright. There was the construction strike at the time, which was affecting the construction industry. What happened was that the week before startup, someone from ArcelorMittal calls me on a Wednesday morning to tell me they need 25 workers to help deliver the line to operations. He asks me for 25 workers. I say, "25 workers, Simon, no problem with that."

On Thursday morning, he calls me back and says, "Fred, it's not 25 workers we need, it's 50." I say, "50, that's a lot of people!" But I tell him, "Simon, we should be good with that." Then on Friday, he calls me again and says, "Fred, it's not 50 guys we need, it's 75." He lists off the trades: electricians, electro-mechanics, welders, plumbers—almost all trades I don't have. So, I say, "Whoa, time out, Simon, this doesn't work! Simon, what's your plan B?" He says, "Fred, you're our plan A, our plan B, our plan C!"

So, I tell him we'll do it, we're on board. We went on the Emploi Québec website and printed out all the résumés that had the keywords "plumber," "welder," and "mechanic." Basically, what he needed was extra hands. And it was an emergency, we had to react.

After that, business went crazy. We increased sales sixfold from June to September. Speaking of financial tools, I remember talking with Bernard every week, sometimes several times a week. Because of the line of credit, I needed to support us financially. We'd already been growing at a nice pace, but now it was like a tidal wave. I had maybe 50 people total on my payroll, and we went from 50 to 200 employees in 3 months. Bernard supported me 200% on this. There was a very good relationship of trust.

Being close to your financial partners is key. In this case, there was no time to prepare. We were in firefighter mode, but we were excellent firefighters for the industrial stuff and Bernard was a good firefighter on the financial side. So it was really a team effort.

Katerine-Lune: I'd like to talk now about the steps a company needs to plan for when it envisages rapid growth. Stéphane, do you want to tell us about these steps?

Stéphane: To keep it simple, I'll go back to the sailboat metaphor that I really like. Before setting sail, there are many things to think about. First, do you have the right boat, the right equipment? Do you have enough food for the voyage? Which route will you take to cut down on sailing time? Do you have the human resources you need to help on the way? Sailing alone isn't necessarily the smartest idea, especially when you're in 60-foot waves.

I was listening to Frédéric earlier. I was close to Bernard. I called him regularly. It was great. One thing Frédéric didn't talk about so much was that fact that when you hire 66 people, you need internal resources for administration. He needs sailors. He needs people to help hoist the sails. He's got both hands on the tiller, but he can't do everything. In short, you need to be well prepared, to visualize. It's impossible to foresee everything, but it's possible to put all the chances on your side to cover the maximum number of risks.

Katerine-Lune: Bernard, what about adapting to different supplier payment terms, which probably get more complicated as you grow? Is that important?

Bernard: It's very important. When you see growth like that, it's often with new or existing customers. But in a situation like that, it tends to be the market that dictates the terms of payment, and not the company. You're going after a new market. You're doing business with a new client. Turnaround times are different.

So, you have to adapt. It's rare that you have enough clout as a company to impose payment terms. The company and the financial institution have to take these terms into account to properly support liquidity.

When you want to grow exponentially, it's important to be in control of all your business processes. You can't manage exponential growth if your bookkeeping or cost tracking is weak, or if you have shortcomings on the workforce or planning side. You have to have enough support and be agile enough in your business processes to be able to grow.

Katerine-Lune: Frédéric, is adapting the key to success at the various stages of exponential growth?

Frédéric: When you hire massively like we did, it obviously diluted Soucy's DNA. At a certain point, as you progress in the organization and as an entrepreneur, you also develop a better idea of what you want. Both for yourself and for your team.

In the end, we realized that yes, growth was fun, but not at any price, because it has a big impact on quality and team spirit. It also has an impact on family life because you're burning the candle at both ends, you're never there, you've got the pedal to the metal. At some point, you have to find a balance in all of this. Because rapid growth can be just as devastating as a decline.

Katerine-Lune: When a business seems to be flourishing from the outside with this exponential growth, it can still be a very difficult time for an entrepreneur, then?

Frédéric: When you're in a really, really high-growth environment, it's obvious that working 40 hours a week isn't enough to keep everything on track. This means that everyone pays a bit of a price. And we're all human beings, fathers and mothers. Morale is very important.

I wouldn't want to destroy that chemistry at any price. All these experiences of life and of being an entrepreneur brought us to think that we have fun working together, so we'll take as much growth as we can handle. And the day we stop having fun, it won't be about turnover or profit or whatever. At that point, we have to be able to sit down and be straight with each other. Look, this is where we're at, but there are cracks showing, and we need to take action if we want to keep growing.

Or, at some point, we may say that we've brought the company to where we wanted it to be. We've brought it to maturity; now we have to work to keep it viable and maintain job stability. It all depends on the company's vision and mission, its values, and the people working there. Then after that, we set our course and make sure we deliver the goods.

Katerine-Lune: Are there any tips you can give us to avoid common mistakes when a business is experiencing exponential growth? Bernard?

Bernard: The points Frédéric just raised are true. In 2010, Frédéric was an entrepreneur, a one-man band. He managed a lot of things. He was heavily involved in operations. But he reached out, listened to people, took advice and started delegating a lot more. He started planning a lot more too, so he's able to manage his time better. To achieve exponential growth, it's important to have the right manager and management team in place. And it's important to protect that team and that entrepreneur.

Frédéric has done really well over the years. For the company per se and also in terms of long-term viability and planning. We can never say it enough, but getting back to Stéphane’s sailing voyage reference, it's about planning, about having enough resources. We always talk about human resources, financial resources, equipment, strategies that are in place.

Why go after this market and not that one? Why this acquisition rather than that one? Soucy has incorporated all that into its planning, in terms of strategic vision. For years, Frédéric has been doing strategic planning and looking for new business opportunities. He doesn't go after all of them, but he knows how to pick and choose. These are the pitfalls to avoid for a company to ensure its long-term survival.

Stéphane: You can boost business volumes, take on more and more contracts, but at some point, there's a limit. Entrepreneurs often pay a lot of attention to their financial balance sheet. But the real financial statement is the cash flow or the cash flow statement.

You have to plan based on practices in the industry you're dealing with. How quickly can you collect accounts receivable? And how quickly do you need to pay suppliers? The difference between the two is where your cash shortfall will be. And there are 3 sources for the funds needed to make that up. Your financial partner is there to support you. Suppliers are there to support it. But there is also the entrepreneur's share, which comes out of their working capital.

When a business fails, it's often because it doesn't have enough working capital to support growth. Once again, I'm talking about resources. There are limits to resources. It's all well and good to make $5 million in profit at the end of the year, but if that $5 million is in accounts receivable or in inventory on the shelves, it's not in the bank.

Katerine-Lune: Frédéric, any advice for entrepreneurs listening in who may have a business on the verge of taking off? Or any mistakes you made where you thought to yourself, I wouldn't do that the same way again.

Frédéric: As far as receivables are concerned, we've had problems with bad accounts. As a smaller local operation, we did a lot of business on a trust basis with our customers. Then we hit the big leagues where it's all contracts, purchase orders and so on and the primary contractor says do the job and the PO will follow. In the end, you end up chasing after your money a bit. After 90 days with a line of credit, your account is no longer recognized. So sometimes you can get into financial trouble because you haven't received your money.

My VP of finance says there are 3 things in finance that are crucial: get the cash, get the cash and get the cash! That's it, there's no other way. It's all about risk too. Which is why we decided in 2010 or 2011 to insure our accounts. That way, if I've done my job as a manager, and the customer has a problem—environmental or whatever—and doesn't pay me; at least I have my insurance to cover that receivable.

The other really important element, which Bernard mentioned earlier, is that I like to surround myself with people who are better than me. Whether it's in finance, human resources, business development or operations, I love being able to learn every day from the people around me because they are solid in their field. I think that's very important, as an entrepreneur, not to be afraid to surround yourself with people who are better than you. It's not about being the one-man show and thinking you know everything. I think it takes a lot of humility. In the end, we are much stronger as a team than as one person. That's pretty much it.

Katerine-Lune: So, what do you think makes a company successful when it grows a lot over a short period of time?

Bernard: One of the first things—we talked about processes, but in growth management, there are so many imponderables—is transparency. How transparent the entrepreneur is with their creditors, and vice versa. Needs have no limits, but resources do. So, each party has to see what their limits are. What are the issues for each? Put yourself in the other's shoes. Try to understand what the company's real issues are in order to better respond to them. It's all about transparency. When there is good communication, when there's transparency, it's a success factor.

Katerine-Lune: Stéphane, your success factors?

Stéphane: If you're about to set sail and you're all alone on the dock, you're going to feel even more alone when you're facing headwinds and 60-foot waves out in the middle of the ocean. So, if you want to go on an adventure, turn on the lights and if you see growth coming, look around the dock and recruit some good people, good sailors, professional engine repair people, whoever you can. Surround yourself with specialists and professionals, that's the recipe.

Katerine-Lune: Frédéric?

Frédéric: I'm going to piggyback on Stéphane's idea a bit. When you set out on a sailboat, you surely have a destination. So, I think at the core, it's a question of strategic planning, of having a vision, a common goal, of communicating it and sharing it with the team. Sure, you need a solid team, but you also need to communicate your vision to all stakeholders, whether it be bankers, customers or suppliers.

I think it's a big adventure. Vision and communication are the keys to success. Because if you have an idea and tell yourself that's where you're going, but you don't share your idea with anyone, you won't be able to get your people all rowing in the same direction to achieve that goal.

Katerine-Lune: Frédéric Soucy, Bernard Sozio and Stéphane Pageau, thank you very much for joining me for Libres échanges. And Frédéric, for your growth, which is a bit like an Atlantic crossing, I hope you're prepared for 60-foot waves, and most of all, I hope you have the wind at your back. Thank you.

Frédéric: Thank you very much.

Bernard: Thank you.

Stéphane: Thank you.

Katerine-Lune: Libres échanges is a presentation of Desjardins Business. You can find all the episodes of the show on Spotify. My name is Katerine-Lune Rollet, thank you for listening.

Benoit: It's important to have the financial resources, but also the time to develop these markets.

Vincent: Don't think that doing business 6,000 km across the Atlantic is beyond your reach.

Katerine-Lune: Hi, this is Katerine-Lune Rollet. You're listening to Libres échanges, a Desjardins Business podcast where I discuss topics related to entrepreneurship. In this episode, I'll be speaking with 2 guests about growing internationally and developing markets abroad. Happy listening.

When business is good, exporting products and services abroad can be both exciting and stressful. How do you know if you're ready? How do you plan for this important phase in the growth of a business?

That's what I'm going to try to understand today with Vincent Stever, co-founder and CEO of TowSoft, and Benoit Marcoux, Expert Advisor, International Services at Desjardins Business.

Hello to you both. Welcome to Libres échanges.

Vincent: Hello.

Benoit: Hello. Thanks for having us.

Katerine-Lune: Vincent Stever, you are CEO of TowSoft, which was founded in 2014. The company currently has 10 employees at its headquarters, and 6 in Paris since spring 2021. Vincent, tell us about your software.

Vincent: TowSoft is an IT company specializing in solutions designed to optimize the roadside assistance and towing and recovery ecosystem. Traditionally, towing companies have operated without much in the way of digital tools, so largely paper based. It's an industry computer developers hadn't paid much attention to. It's quite complex and there are a lot of relationships to manage between the towing company, the person on the side of the road, and the client, whether it's a transport ministry, a highway authority or an assistance or insurance company.

This whole relationship, or ecosystem as we call it, relied on paper and phones. So, the first thing we did was develop software to help towing companies manage their business better and go digital, like other industries today. After that, we developed solutions to help the other important players in this relationship, i.e., the person broken down on the side of the road and the client, in addition to the towing company. So, to digitize this relationship from start to finish.

Katerine-Lune: Thank you. Benoit Marcoux, you've been working in a financial institution for 18 years. What's your role at Desjardins Business? And how do you support entrepreneurs in the export process?

Benoit: I'm part of the International Services team at Desjardins. We offer a full range of payment, risk management, operational, and transactional solutions to companies of all sizes. We also help businesses with market development, finding suppliers, and so on abroad.

Katerine-Lune: If there are business owners listening right now who are hesitant to go international, are there any signs they can look for to tell if their business is ready to export?

Benoit: Obviously, there are fields of business where exporting comes much later in the business development process. A company will start locally. After that, it will gradually grow, probably targeting the region or the province. Often enough, it will then set its sights on other provinces, and eventually the American market. That's a pretty standard pattern. But today, especially in the digital sector, as we'll see with Vincent's experience, things are moving much faster. Of course, there are fewer logistical issues involved in moving software than in moving goods in containers.

We're now seeing companies that start out international, whose first projects are happening abroad. That's very different. Are these companies ready? That's a big question. Obviously, it takes resources to develop internationally, that's clear. But along with resources, yes, financial resources, it also takes time. It takes a management team capable of developing these markets. It takes effort. So, it's important that there be people who are specifically designated to manage these projects.

Katerine-Lune: Vincent, Benoit just told us that the United States is the first country Quebec companies traditionally export. In your case, you set your sights on the Francophonie. Tell us about how you made the move to doing business internationally?

Vincent: As Benoit mentioned, our business is digital, so borders aren't really an issue. We have no logistics; we have no manufacturing. For us, the first step came when we determined our product could be used anywhere on the globe. At the risk of repeating myself, we serve the towing industry, we do roadside assistance optimization. Wherever there are roads, there are cars—and unfortunately those cars break down.

For us, the Francophonie is a really interesting export growth driver that shouldn't be overlooked. In our case it was easier to cross the ocean and target markets in the French-speaking world, starting with France. Quebec has a special relationship with France, both economically and culturally. And in the U.S., we were up against stiffer competition. So, it was easier to cross the Atlantic and start out in France, and from there, to explore opportunities in the rest of the Francophonie.

Obviously, the size of the country counts, too. Looking at France, with its 72 million people, it was clear that there were a lot of potential customers there. And in nearby francophone countries like Belgium or Luxemburg, there are a lot of people and therefore lots of motorists. So theoretically, a lot of breakdowns.

Katerine-Lune: Which means customers for you?

Vincent: Exactly.

Katerine-Lune: Once you said "OK, we're going to France," what were the steps?

Vincent: For us, it all started with a relationship we developed with a distributor. We met the company that became our distributor by pure chance in 2017. We met in Saint-Jean, where we have our office. They were on a trade mission. After that, we went to a trade show. The towing industry has its trade shows just like any other industry. In Quebec, there's an event organized by Association des professionnels du dépannage du Québec. In France, there are 2 shows.

We went to a trade show in 2017 in Lyon held by a French towing association, Association des dépanneurs automobiles de France. Our solution got a lot of attention during the 2-day show. There was a lot of buzz about the Canadians who had just arrived. That's when we realized that there was a room for us in France and interest in our solutions. That's where it all started.

Katerine-Lune: I guess we can say that networking, or word of mouth at this show in your case, and all the steps that helped you later, are a big part of exporting.

Vincent: Definitely. It's a small industry. People talk to each other a lot, help each other a lot. There's a real sense of camaraderie. When some potential customers saw our solution, it quickly made the rounds in the industry.

Katerine-Lune: Benoit, we've just seen that trade shows are one way to meet potential business partners. But when you want to export your products and services, are there any steps to take before you start?

Benoit: There are planning steps that are very important, because doing business abroad comes with risks. There are different ways to export your products, too. You can work from facilities here in Quebec and sell your product abroad. You can open a subsidiary, like Vincent did in France. You can also acquire a company overseas. There are all kinds of ways to approach an overseas market. It's important to choose your approach.

After that, depending on the choices you make, you need to manage the risks involved. The most obvious one is the exchange rate. It's on the news every day, but it has a real impact on a business's results. There is also the risk of default. You know less about the companies you're dealing with, less about local practices and so on. All of these things need to be properly controlled, ideally as soon as possible. Because when you negotiate contracts with people abroad to determine who will be responsible for merchandise, shipping, insurance, and so on, all these things are an integral part of the initial negotiations. It's important to start early in the process to make sure that everything is aligned and that you don't hit any bumps when rolling out the project.

Katerine-Lune: Can you give us some examples of the services or tools you offer?

Benoit: We have a program called International Gateway. It provides businesses with access to people on the ground to help with partner searches, negotiations, and so on. It's less about operations and more about the strategic side.

Katerine-Lune: Let's talk about the International Gateway program. Vincent, how has this program made a difference in the growth of your business?

Vincent: As Benoit mentioned, in the case of France, we did things ourselves because we knew the country better. I had been a frequent visitor to France myself. It's a country that's closer to us. But when we started thinking about doing business in Morocco, Tunisia and Algeria, it was very important for us to be able to analyze the risks, and to analyze the culture as well.

That's where the International Gateway came in. It was very helpful to have people on the ground, local people. We had the opportunity to meet with them in the presence of people from Desjardins. We were able to ensure they had a good grasp of our business model, what our company was about, what our targets were. And they were able to share advice on things to be wary of or to take into consideration when starting out on their home turf. Thanks to the advice we got, we actually decided to start with Morocco and Tunisia because in Algeria, there were things that were more complicated to deal with before doing business in the country. In short, the coaching was very beneficial.

Katerine-Lune: When you want to do business abroad, there are also cultural differences to take into consideration. What can you tell us about that?

Vincent: We set up a subsidiary in France in March, and it's been a cultural learning experience. I thought I knew the culture, but it's completely different at the professional level than at the personal level. We've been employers in France since March, and we've learned what goes with that. When we get our teams working together, that means adapting the language a little, the way we write and talk to each other. I read my emails today, and if I had to reread messages I wrote 5 years ago, it wouldn't be the same language I use now, even when I write to my colleagues in Quebec.

Katerine-Lune: Benoit, do you agree that entrepreneurs sometimes forget about the cultural differences a bit too quickly?

Benoit: Yes, it's definitely an issue. France is a really good example, as we just saw. The culture is different, and on other continents, it can be even more different, because with France, we at least have close ties in terms of language and so on. North Americans tend to get straight to the point in their business dealings, but it's another story in other places. It takes a lot longer to build a relationship beforehand.

I think we need to take that into account. If you don't take the time to learn about the culture, you'll be dealing with ahead of time, or adapt how you talk, write and so on, it can leave a strange impression. I think the ability to adapt is really important for entrepreneurs, companies and teams involved in developing international projects. It takes a lot of adapting.

Vincent: When it comes to a company's reputation, things change completely once you start doing business abroad and the industry finds out. Even for us here at home, bigger companies have started showing a lot more interest in our solutions now that we've successfully sold them to equivalent-sized companies abroad. There's a saying that no one's a prophet in their own land, but once you've proved yourself abroad, it's easier to get people to look at what you're doing. It's been very, very good for us in terms of both image and team size.

Katerine-Lune: Benoit, do you agree with what Vincent just said? Do companies that go international sometimes offer better service to Quebecers because their business has grown and become better known?

Benoit: Definitely. When a company is growing, there are opportunities to improve service. By providing 24-hour service, for example, which may not be possible when the company is smaller. There are all sorts of things that get added on and become necessary. If you want to serve a market in a time zone opposite ours, you have no choice but to extend your service hours. And obviously, that benefits the local clientele as well, so it's interesting.

There are economies of scale as well—all sorts of considerations that come into play when a company is growing. Reputation-wise, I think it's good for the company's image. When a company expands to serve markets overseas, it's seen as a success story. Getting a venture up and running abroad is no easy feat. So, when people see that a company has been able to do this—and more than once in some cases—it gives them confidence here at home too.

Vincent: It's given us a more comprehensive picture of the market, too. We acquire expertise and gain experience outside Quebec and Canada, then use that experience and different perspectives on the industry to bring back improvements and ideas our industry might not even have considered. The opposite is also true. When we go abroad, we bring our homegrown expertise with us. Doing business in different places gives us new insights into our market as well as occasional ideas and innovations that are really interesting.

Katerine-Lune: What advice would you give to entrepreneurs from any industry who want to export? Benoit?

Benoit: The first piece of advice is to determine whether you really have the capacity for it. You have to do some serious strategic thinking at the company level before launching a project abroad. There are a lot of implications. You’ll need to assemble a new team. There are new issues to deal with. You need to familiarize yourself with the country you want to do business in, with regulations and tax impacts. There are all sorts of things to consider that will be different. And you have to remember that the things that have made you successful at home won't necessarily work in markets abroad.

The agri-food industry is a good example. People's tastes are not the same. A product that sells very well in Quebec won't necessarily have the same success abroad. Sometimes you have to adjust your recipe a little. This is true for any venture. Each aspect may be a little different. It's important to think about this, to have a clear plan, and to test things. Ideally, you'll want to do a proper market study. Before investing too much time, plan and study your market properly so you can make an informed choice about where you are going. Vincent mentioned earlier that there was one market, Algeria, they decided not to enter right away. Choices like that are important; if you embark on a project that doesn't really work out, you'll have invested a lot of energy and financial resources, even though there might be another country right next door where things would work better.

So, choosing your market is very important. And surrounding yourself with the right people, as I said. There are many partners. We're lucky, Quebec companies have a lot of resources to help them. We collaborate with all these people. That's why our people meet with them. As soon as there's a project on the table, that's the time to contact the people at Desjardins, our advisors. We have international trade specialists in every Business Centre to have that first discussion, assess the issues, help you find good partners. From there, you build a game plan. This is the first step.

Katerine-Lune: Vincent, what advice would you give to entrepreneurs who are hesitant to take the plunge into exporting?

Vincent: Well, as Benoit was saying, planning is super important. And surrounding yourself with the right people, that's a given. But entrepreneurs being entrepreneurs, there's also an element of risk that goes with all this. Making the leap is important in my view. It's a calculated risk. Above all, don't think that doing business 6,000 km across the Atlantic is beyond your reach. Don't hesitate to look at your industry abroad to see how you stack up in another market.

It's not hard. There are great government programs that encourage entrepreneurs to take those first steps. It shouldn't be seen as something that's not doable, especially for smaller businesses. It's often small companies that hesitate because they're not the same size as the bigger guys. But we're a small company. I think everything is in place today to help companies get started, learn about the tools available, then go out and do it.

Katerine-Lune: Vincent Stever and Benoit Marcoux, thank you very much for joining me on Libres échanges. And Vincent, I hope you conquer the world!

Vincent: Thanks so much. It was a pleasure!

Benoit: Thanks to you.

Katerine-Lune: Libres échanges is a presentation of Desjardins Business. You can find all the episodes of the show on Spotify. My name is Katerine-Lune Rollet, thank you for listening.

Mylène Bruneau: It’s because an entrepreneur at the pre-startup or startup stage is often unaware of the support ecosystem for entrepreneurs.

Pascal Lareau: When you get a mentor, the number of entrepreneurs who are still in business after 5 years will go up to 75%.

Alexandre Boucher-Doddridge: Don’t hesitate to knock on doors and worry about bothering people.

Katerine-Lune Rollet: Hello, I’m Katerine-Lune Rollet. You’re listening to Libres échanges, a Desjardins Business podcast where I look at different topics related to entrepreneurship. Today, I’m going to talk about a key aspect: starting a business.
Starting a business is one of the biggest challenges in a career. You’re at once propelled by the project and nervous about what lies ahead. What should you be focusing on? Whom should you talk to? What resources are available to get you off to a good start? That’s what I’m going to try to find out with my guests today.
Alexandre Boucher-Doddridge, you’re from Saint-Antoine-de-Tilly near Québec City, and you decided to take the leap three years ago, at the age of 26, by creating smart planters. I’d like to talk about your company, HerbiaEra, because in 2019, for your final school project with your partner Anthony Bisson, you were supposed to set up a project and you wanted to combine technology with horticulture, but also to encourage people to garden at home. So what’s the idea behind these two goals?

Alexandre: We developed and marketed innovative technologies for people who don’t have the knowledge or time to garden at home. So we developed indoor planters and a mobile app that makes this possible.

Katerine-Lune: We also have Pascal Lareau with us. You’re an advisor at Desjardins Business and you help people like Alexandre. So what steps are involved in starting a business?

Pascal: Yes, actually, the steps are always the same. But each case is still considered individually. In fact, we start with a vision and then prepare a business plan where the actual product will be able to be created. We check the market and then see if a management team can be set up to complete the plan. Then we look for financing to get the project off the ground.

Katerine-Lune: So if I understand you correctly, you’re a bit like a general practitioner who assesses the challenges entrepreneurs face and then refers them to the right people to help them deal with their respective issues. Is that right?

Pascal: Exactly. Depending on the entrepreneur’s profile, they’ll have access to different types of financing. There are entrepreneurs who start a business as a second career. They are already established, so they’re able to get a certain type of financing. When you’re starting out, say in your twenties, and you’re not established yet, you don’t have any assets, you don’t have any credit history, you’re going to have to turn to other types of financing, perhaps para-governmental, partners, that sort of thing, where financing is obtained based on financial forecasts and business plans. So it’s entirely possible, but you have to check with the entrepreneur to see what their needs are first, and then what their initial situation is so you can properly guide them.

Katerine-Lune: Our third guest is Mylène Bruneau, who is a communications advisor with Développement international Desjardins, a branch of Desjardins Group which the public may be a little less familiar with. So tell me about the services you offer to entrepreneurs.

Mylène: Yes, of course. Développement international Desjardins coordinates programs known as solidarity-based financing, so in collaboration with the Desjardins caisse network as well as community organizations that specialize in supporting entrepreneurs. So there are two programs for entrepreneurs who don’t qualify for traditional financing or credit: Desjardins Microcredit to Businesses and Créavenir. So Desjardins Microcredit to Businesses is for self-employed workers and entrepreneurs of all ages. Créavenir mainly targets entrepreneurs aged 18 to 35. For both programs, we offer financing that takes into account the financial reality of entrepreneurs at the pre-startup and startup stage as well as local support.

Katerine-Lune: Mylène, you believe that the challenge is twice is great for young people and newcomers who want to start a business. Why is it more difficult for them?

Mylène: That’s right. In fact, I’d say the challenge is threefold for these entrepreneurs. Of course, we’re not just targeting newcomers, but they still make up 25% of our clientele with the two programs I mentioned. And entrepreneurs who don’t qualify for traditional credit are faced with a number of challenges. First, for the entrepreneurs we support, like any entrepreneurs, they must be able to generate interest in their project, first prove its value, but also convince lenders and investors that they’re able to successfully carry out the project. So this is the whole idea of building self-confidence, confidence in your project, creating a spark, so that you can believe in them and then believe in their business project. Second, the key is obviously access to financing. This is another challenge for young people, newcomers and entrepreneurs, who, for example, lack collateral, assets and a down payment.

Katerine-Lune: Or even a credit history.

Mylène: Exactly. They don’t have a credit history, they contact investors with only a good idea or sometimes a business that’s just barely taking off. So it’s extremely difficult for them to secure financing. And since this is their situation, that’s why we say they’re excluded from the traditional financing system. And third, the third challenge we could mention, is that an entrepreneur who is in the pre-startup stage or is starting a business is often unaware of the support ecosystem for entrepreneurs. Whom do we contact? What resources are available to help us? Not only in terms of financing, but also in terms of support, networks, contacts, tools, etc. So I would say there’s a certain level of isolation when you start a business project.

Katerine-Lune: It’s true, you first have to know what resources are available to take advantage of them. Alexandre, what were the first steps in starting your business?

Alexandre: Our project was based on innovation, so there was the innovation development stage, which was done with the Université du Québec à Rimouski research chair. But the next step was to get in touch with the community’s entrepreneurial ecosystem, UQAR entrepreneurship, then we were put in contact with the RCMs, people from BDC or Futurpreneur. So at first, it was really about understanding the entire ecosystem, its interaction. The next step was to put together a good business plan and apply to all possible competitions. These competitions really allowed us to get a little cash and then a pat on the back as approval for our product or innovation, our business. So that we could, in our case, after we completed our bachelor’s degree, we could say, hey, we have a bit of cash, there’s some interest, our innovation has real export potential. So we thought, why not start a business.

Katerine-Lune: What’s also special about your project is that fairly early in the initial startup stage you needed a lot of capital fairly quickly because you wanted to use technology, develop your project with a research centre, for instance. How did you get financing?

Alexandre: In our case, we met with people from the Ministère de l’Économie et de l’Innovation. We looked at all the programs that applied. We also went to the college technology transfer centres that are associated with the Institut de technologie agroalimentaire, in our case, called Bioptère. Then we presented our project, our business plan, our vision, as well as our team, the people we were working with; we were no longer just two young people straight out of university, but there were a number of people on the team who joined us and gave us credibility. So we managed to receive a sizable grant called “Programme innovation volet 1,” which acted as an incentive at the start and allowed us to get a number of other loans later on.

Katerine-Lune: A major milestone for both your company and your financing was when you took part in the crowdfunding campaign with La Ruche. Tell us exactly how it went and how it helped you.

Alexandre: Clearly, nothing beats crowdfunding to test a market. Our product was created directly for consumers. So there’s nothing better than having consumers endorse the product. So we did pre-marketing on La Ruche last summer. We’re really happy. Our goal was to have over $100,000 in sales, then we managed to raise almost $300,000, including the grants and loans that were added to the project. As a result, we raised the largest amount in the history of the La Ruche platform to date. So we’re really, really happy. Yes, it gives us cash, financing for the production phase and then to improve the product, but also credibility; it shows that the market is ready for products such as ours. So it’s very promising for the future.

Katerine-Lune: It also has a snowball effect because companies, or, in fact, financial assistance programs, see that there is public interest and there are now more people, more companies that will help you as your crowdfunding project is developed.

Alexandre: Exactly. It definitely gives us exposure. And it also paved the way to different investors, partners, collaborators and financial institutions. So it definitely provided major leverage for a company such as ours.

Katerine-Lune: Mylène was telling us about the Créavenir program. What kind of impact did it have for you?

Alexandre: Through the Créavenir program we were able to get $5,000 in direct grants. And then they joined the La Ruche campaign. So if we reached our goal of $100,000, Créavenir would give us a $5,000 grant and a line of credit. So it’s really great to have this money at the beginning, but it’s… you know, I was also saying that it provides a certain amount of credibility. So when you have Desjardins as a financial partner in a project, it makes other financial partners want to get on board and believe in the project even more.

Katerine-Lune: So, Pascal, what happens during an initial meeting with a financial institution?

Pascal: It basically depends on the entrepreneur’s initial needs. It depends on the business models. Some business models are easier to start up than others, and require less investment. Where innovation is concerned, we need to quote-unquote burn money, if you will, to try to do tests, that sort of thing. If you start your business as a consultant, at that point, let’s say it’s more about just launching the business and having operating tools, as we were talking about earlier where Alexandre was concerned, that is, possibly a credit card or an operating line of credit. But let’s say the investment needs are lower. So what we’re going to check at the outset is the entrepreneur’s business model. And then where they’re at in their development so that we can guide them properly afterwards, meaning, point them to the right partners to help them continue the analysis process if it hasn’t been completed yet. Then, if they have a comprehensive vision and just don’t have enough financing, we’ll try to see what their situation is and direct them to the right partners, either ourselves at the financial institution or the partners we were talking about earlier from Alexandre, Futurpreneur, MicroEntreprendre, La Ruche, Créavenir. All of these programs will be potential tools to help entrepreneurs move forward.

Katerine-Lune: So the first meeting is really when you take the time to assess the situation and find the right resources for the entrepreneur. There are times when you don’t have the answers at the beginning of your journey as an entrepreneur; you can make mistakes. In your case, you have both a mentor and a coach. How do they help you with your business?

Alexandre: Our mentor directs us more by asking us questions, challenging us and saying, “Did you think about this aspect? Why did you do that? How are you managing your human resources?” Questions a little more along those lines. Our coach is really more for the psychological aspect. For me and my partner Anthony to get along, to maintain a work-life balance. You know, everything the entrepreneurial world brings to your personal life, because it’s kind of like me and my partner are in a relationship, actually, a shareholder agreement, and then starting such a big project. So it really allows us to help ourselves in terms of soft skills and know-how, actually.

Katerine-Lune: Is this typical of your generation to say that you need a life coach? Do you think that someone who started a business in the 1970s or 1980s would have seen the importance of getting psychological help in this way?

Alexandre: Maybe our generation is more aware of the difficulties we may experience or the problems that may be caused by the psychological aspects of overexerting ourselves, of always wanting more, working long days and weeks. And sometimes there’s a certain amount of risk too, when you’re involved with innovation; there’s a certain amount of financial risk that comes with it. So our generation may definitely be more open to this. For me, people who don’t have a coach or don’t have those types of resources to talk to, I think it’s really beneficial, and it definitely helps better understand our partner and to help ourselves during tougher times.

Katerine-Lune: Pascal, is there a definition for an ideal mentor?

Pascal: I don’t know if there’s an official definition of an ideal mentor. However, Alexandre already brought up important points, namely that a traditional mentor as I understand the notion when I talk to Desjardins members about this, it’s someone who will guide you through the business model, in the company’s growth, the entrepreneur’s people skills. Meaning that the mentor is not there for the know-how, such as showing a baker how to bake bread. We want the mentor to be there to support entrepreneurs when they have development questions, vision issues, that sort of thing, to challenge them regarding their vision over the long term, short term, medium term, etc. It’s really looking in from the outside. So we’ll try to find an entrepreneur who may be retired, a seasoned entrepreneur who’s been successful in business and will bring, say, some credibility to their comments. In other words, entrepreneurs exhibit a strong personality, whether during the startup stage or in their personal life, right? We have someone who wants to achieve their vision, who’s self-disciplined, self-motivated, etc. Not always someone who wants to be told what to do. It takes people with some credibility to be able to challenge them. So we don’t necessarily want a neighbour who likes us, but an entrepreneur who has already succeeded and will come up with credible comments and be able to provide perspectives which the entrepreneur hasn’t had until now.

Katerine-Lune: Mylène, for a young entrepreneur like Alexandre, but also for newcomers, the people around them are likely very important to ensuring the business’s success, right?

Mylène: Of course. It’s very important to have the right people around you as an entrepreneur. This is one of the success factors that is most often mentioned by the entrepreneurs we support. I think Alexandre’s testimonial shows it very well. Having a mentor as well, but a lot of trust is needed. As Pascal was saying, having someone else who believes in your project, not just your neighbour or your grandmother who thinks you’re very nice and a wonderful person, but a seasoned entrepreneur, someone experienced. It gives you a boost. The entrepreneurs we support often say that the mentoring or support they received, other than financial, is the push that enabled them to move forward, achieve their goal and also face adversity, because God knows there are obstacles and challenges when you start a business. As I said earlier, it’s also about understanding the ecosystem. A seasoned entrepreneur will be able to direct a new business owner to the right resources, to doors they have to knock on, and the keys to those doors as well. So definitely a mentor is one of the keys to success in a business project.

Katerine-Lune: To conclude, what would you tell future entrepreneurs who may not dare to make the leap? Alexandre?

Alexandre: You don’t know everything when you come out of school, especially when you’re young. And even someone who’s older, who’s starting a business, doesn’t know everything, so surround yourself with the best people if you want to be the best, and dare to be entrepreneurial.

Katerine-Lune: Mylène?

Mylène: I would say that you shouldn’t be intimidated by financial institutions or organizations that support entrepreneurs. You often get the impression that entrepreneurship is an impenetrable fortress, but that’s not the case. So I encourage entrepreneurs to knock on the door. Even if you’re just at the pre-startup stage, you only have an idea for a project or started up a business in your basement or your parents’ basement, and your business plan is in your head or in the notes on your iPhone, come see us, come knock at the door of your Desjardins Business Centre, Futurpreneur, RCM, MicroEntreprendre and La Ruche. It’s our job to support you.

Katerine-Lune: Pascal, do you have any closing remarks?

Pascal: Yes, I would repeat a little of what Alexandre said. Meaning that it’s very important to have support, as we see a lot of entrepreneurs in the startup stage who want to be a one-woman or one-man show. They have a vision, self-confidence and determination, but often this will hinder the company’s growth and rapid expansion. In other words, to summarize, an entrepreneur always has a number of very important things to do every day. When they get up in the morning, there’s more than one absolutely essential task to get done. So they always choose the one they like the most and some aspects get neglected. Even if they can do them, they will postpone them and procrastinate. So it’s important to quickly set up a management team, meaning subcontractors, consultants, partners, a mentor, organizations like Futurpreneur, CLD, the financial institution, Desjardins advisors. We’re always available. To get support so you can talk to someone, otherwise you’ll be alone out there. So that’s the really key thing: not to stay alone with your vision, but to get yourself known, get to know your partners, and benefit from what they have to offer.

Katerine-Lune: Based on our discussions, I’d say that starting a business takes courage and determination, but especially being able to ask for help, get support and good mentors to guide you through unknown terrain. Thank you very much to all three of you.
Libres échanges is presented by Desjardins Business. You can find all of the podcasts in the series on Spotify. My name is Katerine-Lune Rollet, thank you for listening.

Daniel Valois: Innovation is always co-creation. It's always a conversation with the end user.

Louis-Philippe Poulin: Reaching out to clients allows us to get a glimpse of their reality, to adapt and to pivot more quickly.

Katerine-Lune Rollet: Hello, this is Katerine-Lune Rollet. You're listening to Libre échanges, a Desjardins Business podcast where I take a closer look at different themes related to entrepreneurship. In this episode, I'm meeting with 2 guests to talk about starting a tech business. Enjoy!
The tech sector occupies a major role in the Quebec economy, and plays a part in raising our international profile. Today, I turn my attention to the entrepreneurs that make up this booming community.
In a start-up context, how do tech companies differ from those in more traditional sectors? That's what I'm going to explore with Louis-Philippe Poulin, founding president of Diffusion Solutions Intégrées, and Daniel Valois, Senior Business Advisor, Innovation and Technology at Desjardins Business.
Louis-Philippe, your company is located in Trois-Rivières. You have more than 300 clients across Canada. What flagship product or technology do you sell?

Louis-Philippe: Our main software is called ProgressionLIVE. Basically, it's a software program that helps SMEs automate their business processes. To be more specific, our clients are service companies, things like electricians, plumbers, people in ventilation or delivery who want to eliminate paper completely. The image I often use is the famous invoice with the yellow copy, the pink copy and the white copy. We're basically doing away with that. We want to eliminate paper in companies and make it faster for them to integrate their accounting and their orders, so that they're more efficient.

Katerine-Lune: Daniel Valois, what's a day in the life of a senior business advisor in innovation and technology?

Daniel: Our role is essentially to design and deploy the technology offering, but for businesses. It's worth describing what a tech company is. It's a company whose value proposition, meaning the gain or solution it offers to a client or the problem it solves, is based on technology. Netflix, which I think is a very good example, has essentially the same value proposition as Blockbuster did back in the day. So, for Blockbuster, what were they looking for as a client? We would go get videos so that we could watch them at home–it's entertainment. Now what did Netflix do? Instead of going to a physical store to pick up a video, they tell you you're going to have access to that same entire library, but right in the comfort of your own home thanks to a certain technology. Technology evolves in a frequently volatile, uncertain, complex and ambiguous environment. New technologies are introduced every day. What was interesting a while ago can change very quickly. So, because of this, you need processes, you need highly adaptable products. We're here, really, first and foremost, for our members, to make sure we have something good to offer them. What we're doing is taking a process that's often inefficient, that often takes a long time, that can lead to mistakes, and making it more efficient. So we allow a company to do more with less. And that's exactly what we're doing with all the solutions at Diffusion Solutions Intégrées.

Katerine-Lune: While we're on the topic, let's talk about your relationship. Louis-Philippe, what's the day-to-day like with Daniel?

Louis-Philippe: Basically, our relationship has evolved over time, but it's quickly turned into more of a relationship centred on coaching, mentoring and integration into the senior management committee. It often happens in technology that we love innovation and want to push to create new things, but we don't know whether what we're doing will work. So essentially, this creates a bit of uncertainty among employees, who might be, let's say, almost distrustful because it takes them a little bit out of their comfort zone. But the reason we're doing this is to try to stay ahead of the curve because if you take the example Daniel gave, Blockbuster versus Netflix, one of them wasn't ahead of the curve and missed the boat a bit, I think. And what Daniel brings to the table is showing us, with his expertise, and other commissions and other firms he sees–offering us a bit of help there. Because we happen to be a small business with 30 to 35 employees. We can't have full-time employees doing just business intelligence or market analysis. We all have to keep on top of it a bit. So it fosters this mindset throughout the company.

Katerine-Lune: In previous episodes of Libres Échanges, all of our guests, without exception, touted the importance of having a coach, a mentor, people who guide us through our entrepreneurial journey. Is this also true in the tech sector?

Daniel: It's certainly important, but once again, volatility and uncertainty–the fact that everything is constantly changing–make it even more important for this sector, in my opinion, because we have no choice but to keep our eye on the ball in terms of our operations. We have no choice but to constantly be evolving in terms of what we do, and successfully meeting our clients' needs. And then, every once in a while, someone who is able to look in from the outside, this advisory committee, that's what I try to push as hard as possible, someone to whom we can make even a quick 5-minute phone call to say, "Hey, so I have this idea; am I completely out to lunch?" And at the same time, have people on the advisory committee who can bring in outside ideas or who have opportunities or risks on their radar. I think this is essential in this sector. Now, I think it's just as important in all sectors. But when you look at the market in which technologies evolve, a manufacturing company will often start thinking about an advisory committee only when it's reached a certain maturity. In tech, on the other hand, you almost have to have one right away, or else make sure you have a coach somewhere to guide you. I think it has to be done very, very quickly in tech.

Katerine-Lune: Louis-Philippe?

Louis-Philippe: When we're amongst ourselves in the company, we always come up with the best ideas and we convince ourselves that they're the best ideas, and that we're really good at this, that we're the best. Then eventually someone from outside the circle comes in, they come back with 2 or 3 pointed questions, and then we're like, whoops! We hadn't thought of that. So, ultimately, our best idea or best decision was maybe a bit bad.

Daniel: You know, it's often said that it's important to learn from our mistakes. But an even better trick is to try to learn from other people's mistakes!

Louis-Philippe: Yes, exactly!

Katerine-Lune: Let's talk about tech startups. Are there some common mistakes that entrepreneurs make?

Louis-Philippe: It's hard to answer because I don't know if they were mistakes or learning experiences. But I started a business, I was 24 when I started. Of course, we didn't seek out very much outside help. We didn't really seek out money either. We used our own self-generated funds. It may have gone a bit slower as a result. The advice I got, the only advice I got at the time was from my accountant, and it was to go out and get clients. And I think that's still good advice. Because going after clients and meeting with the people who will ultimately be using our service or our product will enable us to get a glimpse of their reality, to adapt, to avoid being in our own little world making a product for a year, 2 years, and then ta-da! Here's my program that, in the end, maybe doesn't really meet any needs. It allows us, at least potentially, to pivot more quickly. That's what happened to me.

Katerine-Lune: Daniel?

Daniel: That's a very good point. What we're doing is innovating. We're innovating in that we're introducing ourselves to clients with our small team. And often, the only person on our team is us, that's it. You're there in front of the client, and like someone who's placing an order, you try to figure out what their needs are. And after that, well, we take all sorts of notes on their needs, bring them back to our small team, and say, OK, this is my understanding of their need. Then we try to come up with a complete solution. And then we come to what I call–and pardon the expression–the programmer's high, where at a certain point it's just fun, because we're saying to ourselves, "Hey, while we're at it,"–a bit like when you're building your new house–"While we're at it, we could also do this or that, that might be nice." Then we end up in a situation where we had an initial request which we made improvements to, and then when we deliver the solution to the client, the response is often, “That's not at all what I was expecting!" But the truth is that it's not … it's a shared problem, but one that will always exist in innovation, that it's not so much that we misunderstood what the client wanted, it's that, often, when we innovate, we're doing something new. This makes it difficult for the client to even fully understand what they, themselves, want. And so there's the famous solution of offering something of minimum value, to quickly come out with something for the client. The analogy that comes to mind is, you know, the one about the cake. Say you've made a cake with the frosting, the little princesses on it, the text, all the sprinkles, then you try to deliver it to the client. And you're continually disappointed because you're told, "That's not at all what I wanted." The principle in tech is that it's often better to try to make the cake not as a whole all at once, but one slice at a time. Then you get a slice out to the client as quickly as possible, so they can taste it, and so you can know, "Does this meet your expectations so far? Yes, OK perfect, we'll continue and expand on this together." Innovation is always co-creation. It's always a conversation with the end user to understand what they like and don't like. It also takes an open mind to be able to say that your initial vision, well, it wasn't the right one. And it's the client who tells us what's needed at the end of the day.

Katerine-Lune: Is there a difference between starting a tech business and starting a more traditional one?

Daniel: What I see, which is quite typical of tech companies, is that more and more we're seeing companies that aren't developing a business so much as simply developing technology. A business is not just your value proposition, it's, "Who are your clients going to be? What are your client segments? How will you communicate with them? How will you sell your product, your revenue model, your key partners, your key activities?" Putting all that together, back in the day, and in other sectors, that's done at the outset. In tech, it seems to happen rather quickly that we become so focused on solving one specific problem that we jump in with the technology and we often forget that we're not just developing technology, we're developing a business as a whole. And this means that before you get too far in the start-up process, you have to ask yourself the question, "OK, is my technology generating a gain for someone or solving a problem for someone?" That's the first thing, we at least need to have that. But after that, sure, we may have a solution to an existing problem, but, OK, now how do I reach that market? But we should at the very least keep in mind that we're not developing technology; we're developing a business. And I think that's something we see more in tech than in any other sector.

Katerine-Lune: I'm guessing, Louis-Philippe, that this example speaks to you because that was your experience. You started your business with a roommate that you also went to school with. Is it a challenge for tech entrepreneurs who are at the helm of tech companies to tell themselves, I'm a programmer, but at a certain point I realize that I need help with marketing, that I need help with accounting? Does it come as a shock sometimes in their entrepreneurial journey?

Louis-Philippe: Well, I think that in tech or in other fields, a classic move is to try to surround ourselves with the best people in our midst to supplement what we lack in terms of strengths. But that's harder to do at first when you don't really have the money, the financial means to hire people. So in my case, I'm kind of the one who developed skills by seeking out training courses on this and that, and refresher training. I was a bit more of a generalist in the end, so I was able to make some progress in accounting, sales and analysis. But that was some time ago. After that, of course, when the time comes to put together the team, I have to have people who will support me. In fact, the goal is to hire people who are better than me. And so today everyone is better than me, thankfully, in their specialty, in their field.

Katerine-Lune: Probably all the entrepreneurs from various fields tuning in would say that you always have to be innovative, but I think this is especially true, obviously, for all fields related to tech. Is this appetite for what's new essential?

Daniel: Definitely! I mean, I don't want to speak for you, Louis-Philippe; I'd be very surprised if we had different responses to this. In tech, frankly, a lot of the skills I had 4 or 5 years ago, these days, gosh, I don't even know if I use them 1 percent of the time. And the main quality that we have, I think–and in my discussions with Louis-Philippe, that's often what it is–you know, we have our whole library that's full to the gills, and then the conversation always turns to, “Hey, have you heard about this new thing that's coming out?" And so we don't develop based on our experience of what we've learned from the past. To an extent, yes, but our decisions tend to be based on our understanding of what's coming. You know, it's kind of like that Wayne Gretzky quote: “Skate to where the puck is going, not to where it's been." Well, that's what technology is all about. And that only comes with curiosity, I think. That's the solution.

Katerine-Lune: Louis-Philippe?

Louis-Philippe: For us, when we first arrived on the market, we were 2 people in an apartment in Montreal who just, like, created a program. And we started getting clients: 1, then 2, then 10, then 50. But ultimately, we went after these clients, and it wasn't a competitor going after them who's established and who's got a large client list; it was a small company of 2 people. So we could easily have the same thing happen to us tomorrow by some new startup. So that's where it's extremely competitive as well. Competitors aren't just across the street or in the next town over; we're dealing with competition on a global scale. So it could be any company from who knows where that produces an offering that becomes kind of the product to meet an important need, that comes in and dominates the market. So with this in mind, we know we always have to be ahead of the curve, to be thinking about innovation.

Daniel: You know, a lot of times our tech competitor isn't the one we've known forever, who does more or less the same thing as us but who suddenly just does it better. It's often a startup that comes along with a small piece of everything we're doing, but they do it using new technology. And then they sneak up behind us and we never saw them coming.

Katerine-Lune: Is there also a particular aspect to working with new technologies–you know, you're talking to clients who may not understand you–how should you talk to clients?

Louis-Philippe: That's partly why I don't program anymore; I've become a tech popularizer. That's basically what it's been, especially in our sector, given that there are a lot of SMEs. These are people who don't have an in-house IT department, for example, who don't have the resources or skills, really, to deal with that. So we've taken on a bit of a dissemination and training role. It's a lot of support, really, that we have to provide on a daily basis. Yes, it's the boss who makes the decision to implement a certain technology, that's what we want. But in the end, it's not the boss that's going to be involved in implementing it. They're not going to be the one using it; their employees are. And as for the employees, they're a bit wary because we're changing the way they do things. We're coming in and changing their routine, so there we have our first obstacle. And second, they may also not even be comfortable with technology. That's what's going to determine whether the implementation is a success or a failure: the desire for people to want it to work. But it's about getting them ready to accept this new technology and to see it as an ally.

Katerine-Lune: Daniel, do you have anything to add?

Daniel: I think the key thing in tech is that the value and quality of our service offering is not up to us to judge. And that's a common mistake. Ultimately, the client in the judge. And in that sense, we're only as good as what we're able to make people understand, not what we're able to do, but what we're able to make our clients understand.

Katerine-Lune: Do you have any advice for a tech entrepreneur who's looking to get financing?

Daniel: It all starts with making sure you don't go to a financial institution with just your technology; you have to show up with a comprehensive business model. For me, the tool of choice is the famous Business Model Canvas, where you have to summarize the fundamental elements of your business model in 9 key points on a single page. The other thing I'd mention is making sure you have support when you're dealing with a financial institution. There's significant added value in being well supported by professionals when dealing with the market. The other thing I'd like to add is the importance of understanding what your business objectives are. Don't just throw around buzz words–pardon the term–but make sure you're coherent and that you really understand what your short-, medium- and long-term goals are. That you properly translate them into financial projections. That you understand how comfortable you, yourself, are with managing a business. Some people are comfortable managing with a high amount of debt. Others will say, "I like to have more security, more breathing room, more flexibility in my management." It's important to know yourself as an entrepreneur, and having the right tools to fully understand that, I think, is essential.

Katerine-Lune: Louis-Philippe, say there are 2 roommates living in their apartment in Montreal who want to start a business. What advice would you give them?

Louis-Philippe: I've definitely always been interested in the client side of things because I find it, quote-unquote, pretty simple. And at the same time, if you want to start a business and you aren't focused solely on technology, well, you'll have people who are going to use that technology. And they'll also be able to give you comments. So you'll want to rather quickly find clients or people who are ready to participate in the development process. In IT, we use the term MVP, or minimum viable product, so a product that works, but with the minimum required for it to be usable. So maybe there are some buttons or aesthetic features missing, maybe there are features that haven't been added yet, but we're trying to strip it down to the bare essentials. So it allows us to move faster and allows people to test it out. To not be afraid, basically, to have clients or other people try it out because the faster you do it, the faster you'll get feedback that will help you adapt: to immediately adapt your product, your technology, which may ultimately meet a need that you hadn't even identified or that you didn't think was the most important. So these 2 aspects are more or less what I would advise. Because in the end, if you're starting a tech company, given that you don't need that big an investment, I think the advice is that it can be fast and you can quickly test the market, in other words, see if you made the right decisions or choices.

Katerine-Lune: Daniel Valois, Louis-Philippe Poulin, thank you so much for your very insightful advice and observations that have helped us better understand your field. Wishing many years of success for Diffusion Solutions Intégrées, and for your business partnership.
Libres échanges is a Desjardins Business production. You can find all episodes of the series on Spotify. My name is Katerine-Lune Rollet, thank you for listening.

Mériane Labrie: We support one another. We’re going to want to help each other, and that’s a huge strength.

Ruth Vachon: And we need role models that inspire us in every way.

Katerine-Lune Rollet: Hello, this is Katerine-Lune Rollet. You’re listening to Libres échanges, a Desjardins Business podcast where I look at different topics related to entrepreneurship. Today, I’m meeting with two exceptional women to talk about female entrepreneurship. Enjoy!
In 2021, only 16% of Canadian businesses were majority-owned by women. What know-how do we need to play a bigger role in the market?
Today, I’m meeting with two women entrepreneurs to talk about their career path, the challenges they’ve faced, and the lessons they’ve learned.
Ruth Vachon, welcome to Libres échanges. You were an entrepreneur yourself for a long time, and now you’re the CEO of the Réseau des femmes d’affaires du Québec. How does this network help women entrepreneurs? In 2021, only 16% of Canadian businesses were majority-owned by women. What know-how do we need to play a bigger role in the market?

Ruth: This year, the network is celebrating its 40th anniversary. We’ve been around for 40 years, and the main purpose of the network is to help women entrepreneurs benefit from various opportunities. So we’re seen as a network that’s very hands-on in helping women get contracts that otherwise would be harder to get.

Katerine-Lune: So what services do you provide to women entrepreneurs?

Ruth: What we do for women entrepreneurs is make large companies aware of the impact of every small action so that they will purchase products and services from women entrepreneurs and other minority groups.

Katerine-Lune: Because for you, the economic potential is really the most important element for women entrepreneurs?

Ruth: I bring it up all the time because it’s almost visceral. People often ask me why we’re still talking about women entrepreneurs when we don’t talk about just entrepreneurship. Because the process is different over time. We have much less longevity than our male counterparts. When I came, I would say to myself, “Well, we’re not there, we’re not talking about this anymore.” But beyond what people may think, the figures speak for themselves, because, as I said earlier, we at the Network are seeing it from the perspective of obtaining contracts for women entrepreneurs, but according to the statistics, only 1% of these contracts are awarded to women entrepreneurs where large companies are concerned. So 99% of orders go elsewhere than to a woman entrepreneur.

Katerine-Lune: Our second guest started a company to wage a war on refined sugar by creating food products using her favourite ingredient, date puree. Mériane Labrie is the founder of Madame Labriski. First, tell us who Madame Labriski is.

Mériane: Madame Labriski started from a blog. We have now sold 300,000 copies of cookbooks in Quebec. Two published in English Canada and the United States, and one in France. I have 12 food products available in grocery stores – everything is sweetened with date puree. I go on speaking tours where I give presentations to kindergarten students as well as company executives. So, different topics by a marathon runner, a determined woman, a visionary. And there’s also a collection of youth novels in which Mini Labriski speaks to children, and shows them that when you eat healthy, when you believe very strongly in yourself, anything is possible.

Katerine-Lune: Ruth, could you say that Mériane is able to make a good sales pitch?

Ruth: You could say that she’s able to make a good sales pitch and that could influence a huge number of people. But not everyone is born with knowing how to make a sales pitch. You know, Mériane, there aren’t any on every street corner, although we’d like there to be more. We need to practice, to prepare. Preparing as a group to make a pitch, I’m telling you, is extremely powerful.

Katerine-Lune: It must a great thing to do. Mériane, you’re obviously a born salesperson, but not everyone may have it in them. Do you have any advice for us?

Mériane: I always say it’s key for entrepreneurs. We are the best sellers of our product. We have to master this art, and it’s something that you develop over time. You build it up like a muscle. What’s important is that people quickly understand why our idea is so brilliant, and why our company, our product, is essential. Then we have to add our own flavour to make sure people remember us. Because I often tell people it comes from the heart; after that, it’s our enthusiasm. Act as if you were a little girl or boy standing in front of your mirror singing. We’ve all done that, it’s the same thing. You have to be bold, and it’s also a question of confidence. Do you believe in what you do? Do you? The stars in your eyes, work on translating them in words, have 100 or 120 words that are extremely impactful. And then people are going to say, I want that, I want their product. Well, I really believe that.

Katerine-Lune: Can you give us an overall picture of women entrepreneurs in Quebec?

Ruth: 16% of businesses are majority-owned by women. But when you go a little further in terms of number of employees, it’s fewer than five employees. So that means that opportunities are being lost somewhere because you don’t have time to do everything. That’s why we focused on this area and how we can help these women whose businesses are growing and who want to get contracts and aren’t necessarily able to go out all the time to develop them. It’s true that we often come into the world with a lot of confidence, but what prevents us from moving ahead and going further is often the self-esteem that’s associated with the confidence. I’m confident that tomorrow morning I’m going to go to such and such a place and forge ahead, I’m going to do it. However, what often holds me back is the self-esteem that’s related to this, by saying I think I won’t be– the value I place on what I do, I tend to minimize it, and this is a major obstacle to our company’s development. So when you have fewer than five employees, that means that you need help developing your markets.

Katerine-Lune: What are women’s strengths in business?

Mériane: A woman’s strong point in business… I think we definitely have an emotional side. And I see this a lot, for example, in the women’s network, whether it’s the Réseau des femmes d’affaires or in other networks. We have an emotional side and a supportive side. We’re going to want to help each other, and that’s a huge strength. It’s all about where I’ve been and where I’m coming from. I don’t come from a family of entrepreneurs and my parents weren’t wealthy either. Now I’m 43 and I feel like Joan of Arc with a machete clearing the path ahead. But that’s my story. Nothing will stop me. I have a duty to be ready, to have a vision, to be firmly anchored, to do what I do well. I never said to myself, “Oh, well, I’m a woman.” I probably don’t come from that generation. I’m a woman and I’m going to find my way. It comes from my education, from the fact that I’m a marathon runner, that no matter what I do, if I prepare, if I have a vision and I prepare, I’ll get to where I want to go. For me, it’s the marathon, running, that taught me about entrepreneurship, gave me tools, showed me that I had no limits and that I could move forward.

Katerine-Lune: But it’s true that running a business is a long marathon, not a sprint. I think we also have to always keep that in mind for women entrepreneurs. Ruth, what do you consider to be women’s strengths in business?

Ruth: I would say determination. Women have a goal. But one of the pitfalls, I would say, is often to consider a means to an end. So when I do something, I expect it to be the right action. So determination is going to save things, because we’re going to make it up. I also find that women are extremely courageous. Because we don’t tend to take the shortest route. We’re going to take a lot of short detours to get to where we want to go. But determination and courage will save us. And often women, with a little bit of help – Mériane was talking about helping one another – go very, very far.

Katerine-Lune: Could it be that women are undermining themselves? A woman will look at a job, but if she doesn’t have all the skills required for the job, she won’t apply. Whereas a man, if he has 50% or 70% of the required skills, will. Are we, as women, sabotaging ourselves in some way?

Ruth: It’s true that business women, when applying for a job, if they don’t feel they have 100% of what is asked for in the call for tenders, will often refrain because they don’t think they are qualified. So they need a little help. We’re often… I say it a lot – most of the time we’re our own worst enemies. We often don’t need others to undermine us. But I’m sure Mériane has something to say on this topic.

Mériane: When I first started in the food industry, which I wasn’t familiar with, I would ask for things. And at the time there were people around me who said no, you’re small, you can’t. And that bothered me. I had a male partner whom I bought out because I didn’t want to hear that anymore. For me, it was “we’re moving ahead.” I’m still at the stage where I wear a number of hats. Right now I’m in a growth crisis, and that’s a huge step. So there are aspects that I feel less confident about. Where I feel confident, really confident, and I know that I have strong communication skills, which is a great asset, but there are areas where I lack confidence, for sure.

Katerine-Lune: How important is it to have the right kind of people around you? As you just said, Mériane, you’re in a pivotal point in your business, you want to grow even more. You still want to consider sources of financing, which you never did before because you never took out any loans. You paid for everything from your book sales and processed products, among other things. How do you know how to surround yourself with the right people and when to do so?

Mériane: I used to think that if I had to borrow money, it was because I wasn’t successful. But that’s not the right way to think. Today, I know, I have an opportunity to reinject money. My company has no debt. I come from an environment where we didn’t have much. I’ve been working since the age of 11. So it came from that side, that I became aware and said no, Mériane, you’re going to grow your business, you’re going to do it. So I’m preparing my application. Right now, I’m going through a process to help myself grow, and it’s not so simple. But I’m at a crossroads. Either you stay with the status quo or you take risks, meaning you have to engage to move to another gear. So that I can do tasks where I really excel, not tasks I don’t talk to you about where maybe Ruth goes “Mériane, I don’t recognize you!” But it’s a big step to say OK, I need to get people because otherwise I won’t be able to keep up. Otherwise I’ll get sick. It’s not that clear-cut.

Katerine-Lune: Ruth, you often say that women get advice from people who are very close to them: their spouse, family, neighbours, whereas these people may not be best suited to help them with their business.

Ruth: That’s well said. Well, actually, it’s something like what Mériane just said because she says, “I’m going to have to get a loan; I haven’t applied yet.” And that’s typically female behaviour, where we often take money from our own savings. Once we’ve used up our own savings, we dip into the family’s savings, which we call love money. Then when there’s none left, we go to the bank. In fact, it’s when you’re starting up that it’s time to go, where you have some money, you have invested capital, you’re able to make it grow. So what actually happens, when I’ve used my savings, the love money, when I’m with my advisory board at dinner on Saturday night, with my husband and mother who lent me money, for example, and someone asks me: “How’s your business doing?” “Oh, I’m doing really well; I’m thinking of expanding.” So your husband, who’s at home and also gave you money, says “Oh!” He’s thinking, “So from now on, my wife isn’t going to be at home as much.” And the mother who hears the same thing says, “Oh, what happens if my daughter expands and goes bankrupt. So it’s a risk for her.” And the woman entrepreneur says, “I have such great support, I’m surrounded by people who love me and give me good advice, where there is a constant conflict of interest. So the art of having the right people around you is to seek out advice with no conflict of interest, because you don’t know, is it the spouse talking or the person you trust who will give you the advice you need right now.

Katerine-Lune: What happens when you actually go meet with a financial advisor, go get financing? Do women again have a different view of how you have to come prepared compared to how some male entrepreneurs will come to see their financial advisor?

Ruth: Of course, because we come with a fear of rejection. So I’m so afraid of being refused that I’d rather not go. Whereas a man is always going to do what needs to be done. It’s: “I don’t need money, but I’d like you to know what my life goals are. So I build this relationship before going any further.” Your account manager is your best friend. It’s a relationship that you create because in real life, you have to be in regular contact with him or her.

Katerine-Lune: So in a situation where women experience rejection, whether it’s because our idea wasn’t accepted or because we didn’t get the financing we wanted, how do we cope with that?

Ruth: We live with rejection by talking to others, by not isolating ourselves. We talked about the importance of being supported, but the importance of being in a network with people you can talk to, have discussions with. Because you’re never the only one who’s living through a certain situation. And the fact of talking about it leads us to potential solutions that are so interesting. But you need switchers on the market to be able to move toward solutions that are all equally interesting, but that can take a totally different direction from where you thought it would go.

Katerine-Lune: Yes, you are absolutely right. The important thing is to establish a relationship of trust with our account manager to learn about all the tools that are available to help the business grow.
If there are young women or women of any age listening to us who would like to start a business and don’t believe they have the inner strength that you both seem to have, what advice would you give them?

Mériane: For me, the most important thing is to have belief. And people often don’t exactly know what they want. If that’s really what you want, you believe in it, no matter what your background or your great idea. And then the important thing is to take small steps each day to realize your business vision.

Ruth: How many times do you meet women who say, “Oh, I would love to do this, it’s my dream, that’s what I want.” Well actually, when you stop to think, I’m living my life right now. When I’m old, what do I want to say about myself? Do I want to say that I did it or should have done it? So going into business is the same thing. I’m assuming that this is the life I’m living. I’m going to live it the way I want. I’m going to do it the way I want to. And the day I say, I’ve been dreaming about this so much, the longer I wait, the more I delay having the life I want to create.

Katerine-Lune: So, ladies, you’re both really so inspiring. I was completely energized during the last 20 minutes! So, Ruth, I’m going to sign up on the network, and Mériane, I’m looking forward to your new products at the grocery store. I can’t wait to taste everything that’s being made with date puree. Thank you very much for being with us.

Ruth: It was a pleasure.

Mériane: Madame Labriski says thank you!

Katerine-Lune: Libres échanges is presented by Desjardins Business. You can find all of the podcasts in the series on Spotify. My name is Katerine-Lune Rollet and thank you for tuning in.

Valérie: What we realize is that my parents started the business from nothing; they didn't even have a hammer.

Jasmin: It's also a challenge to manage growth and productivity.

André: And we have to deal with the whims of mother nature.

Katerine-Lune: Hello, I'm Katerine-Lune Rollet. You're listening to Libre échanges, a Desjardins Business podcast where I talk with local entrepreneurs. Today, I'd like to take you into the agriculture sector to talk about growth challenges. Enjoy the podcast.
Entrepreneurs in the agricultural sector face many challenges. To talk about them, I'm pleased to be meeting with 2 major agricultural producers who've come to tell us what it's like running their businesses. During our discussion, I'll try to get an understanding of the investment, cash flow and profitability challenges involved in managing a large family farm.
Valérie Jutras: Your parents founded Les Cultures de chez nous near Drummondville in 1981. Now you're the operations manager and your 2 brothers are also involved in the family farm. Tell us a bit about the history of your farm. What do you grow there?

Valérie: We mainly grow leeks. You could say we're the main producer of leeks in Quebec, but we also grow asparagus in season. The asparagus season in Quebec lasts only 6 intense weeks. We also have a pick-your-own berries operation and we grow berries as a field crop for rotation purposes. And we also have a new crop: We were bored, so we started growing some squash.

Katerine-Lune: André Massicotte: Your parents started the Paul Massicotte et Fils family farm in the Mauricie region in 1965. And if I understand correctly, you've done every job on the farm at one time or another since you were a kid. And today, you're the CEO and co-owner. So if Valérie was born into leeks, can we say you were born into cabbages?

André: Yes, you could say we're into cabbages and the good coleslaw we process here on the farm. We grow cabbages, broccoli, cauliflower and celery. We also grow strawberries and have slightly more traditional field crops and a dairy operation. Then with all the vegetables, we make processed products, coleslaw, potato salad and macaroni salad. And for people with a sweet tooth, we also make delicious pastries.

Katerine-Lune: You're both very humble and haven't talked about the size of your farms. I think it's important to explain, Valérie, that Les Cultures de chez nous is an 800-acre operation. And André, your farm has more than 1,000 acres. So, these are very large farms. Before I go on, there's one more person joining us today: Jasmin Rousseau. Jasmin, you have training in agricultural economics and you've been with Desjardins Business for 16 years, managing large-scale farm accounts, such as those of our other 2 guests. I think you know Valérie well, do you not?

Jasmin: I sure do. I'm her account manager and account manager for Les Cultures de chez nous.

Katerine-Lune: What exactly does an account manager do for a farm business?

Jasmin: As an account manager, I'd say that I do 2 main things. First, I'm a financial advisor for all the business's operating needs, such as operations cash flow, financing, equipment and long-term capital investment, foreign currency requirements, credit cards and payroll services, etc. But at the same time, I feel that an account manager is also a partner–a partner in the business's strategic development and growth, and in the business's succession planning. I'm a partner is the sense that I propose financing strategies tailored to members' needs and concerns.

Katerine-Lune: Valérie, I can imagine that running a family farm has its share of challenges. Can you give us some specific examples?

Valérie: Yes, there are a lot of challenges because, as the second generation, we're still working together with my parents–we're all involved. I would perhaps say that it's a matter of aligning visions, mentalities and ways of doing things. And you have to realize that when that my parents started the business; it was just the 2 of them; they started with nothing and didn't have many employees. Now we have 70 employees and we export to the United States. Everything from advertising to Facebook to social media; it all takes up a lot of time and effort. Of course, there's a bit of a difference with my father; I would say that sometimes we don't have the same vision of balancing work and family life. So, those are the challenges, but the important thing is to learn how to talk to one another, communicate and monetize our budgets; I think those are things we need to do more now because the business is no longer what it was in the very beginning.

Katerine-Lune: Yes, that’s right. The more a farm grows, the more important having good communication becomes.
A big farm is a big investment. Take, for example, what it costs to acquire land, equipment and machinery. Valérie, you just told us that your parents really had nothing when they started their business. What were the major investments for Les Cultures de chez nous?

Valérie: As you said, they started from nothing; so, at the time, they didn't even have a hammer. So, that's more than starting from nothing! But first and foremost, of course, the major investment at the time was purchasing the farm and the land. Then it's all of the infrastructure and equipment. Leeks are a vegetable that's still not very well known, and at the time, they were a very, very marginal crop. Leek-growing had not been developed for Quebec. My parents were in France at the time because there was a much higher consumption of leeks there; leek-growing was very advanced there, compared with Quebec. So, it was really about all the machinery and equipment. After that, there was production line equipment to buy. Then, when you want to produce the sliced leeks, you have to make another investment to expand the business and fit up a processing room. When we talk about having a cold room to use every year, if we want to have Quebec leeks on the shelves for as long as possible, a five- or six-hundred-thousand-dollar investment is needed to install a cold room that can accommodate all the leeks for a month, in November. Those are more or less the big investments. Over the years, you might also buy additional land because you need it and want to expand. The same goes for advertising and, in our case, for computer systems. Nowadays, farms are all about transferability, hygiene and food supply. You also have to invest in that; perhaps a smaller amount than you would to buy land, but you have to take that into account; it can't be overlooked.

Katerine-Lune: André: You have a very diverse range of products, including dairy products, market gardening vegetables and processed products. Is it a recipe for success not to put all your eggs in one basket?

André: When you have a number of business lines, it's like a stock market investment portfolio or something like that, which in the end makes for a somewhat diversified investment. Sometimes a traditional business line, such as our dairy operation, is our cash cow. A few years ago, it was food processing in the end that gave us a better year and was profitable on a regular basis. Then when you have a number of different business lines, it's like a risky to medium-risk investment portfolio with bigger risks thrown in. The result is that it provides a bit of overall financial security for the company.

Katerine-Lune: They say that the return on investment in the food processing sector is over 3 or 4 years. Whereas, in the agriculture sector, it's more than 7 to 10 years. Jasmin, are there other advantages to diversifying production as André is doing?

Jasmin: The agri-food processing sector is kind of between pure agriculture and commercial agriculture. We want a slightly faster return on investment. The risk is different and the market is different. And in farming, we have longer-term assets, which underpin investments. So it gives us a longer service life or a slightly longer return for the investment objective.

Katerine-Lune: Agricultural entrepreneurs may be ahead of the curve, but there are many factors beyond their control. Do the whims of mother nature and the obvious climate challenges have an impact on crop forecasts and the company's cash flow? Valérie.

Valérie: Yes, in our case, mother nature is part of our daily lives. I have to say that over time, she's given us a few grey hairs! We try to plan as much as possible when we meet, especially in winter, whether it be about land area– we've also diversified a bit more to protect ourselves, as André said. Based on our clients' expectations, we want to grow so many leeks and so much asparagus and we apportion the areas for those crops accordingly. But sometimes the unexpected happens; it could be in our greenhouses where we start our leeks from seed, and we're not protected from a possible outbreak of disease in the greenhouses. Even if things have been going well for 5 to 10 years, all of a sudden, it just takes a small virus or bacteria and then we don't know why we can't get the seeds to germinate as they should. Then at our level of operation, when you have a 2% or 3% germination rate out of 8 million seeds, it still has a big impact on cash flow because I'll have fewer leeks. I paid for the seed and greenhouse maintenance costs. If we talk about when it's time to plant our leeks or asparagus in the field, there's a good example: we had an early spring this year. Everyone's happy because it's hot weather. The asparagus is sprouting early, the strawberry plants are growing; they're in blossom, but there's always a full moon in May, and it was later this year. So we had a 3-day freeze at minus 4, which is very, very harmful and risky for strawberries. We had to get up during the night; our teams got up to irrigate to try to protect the plants, but we had frost despite everything we did. Here's another example: We've just lost a few harvest days, which is directly related to profitability or cash flow, if you will. Because if I sell 50,000 dozen less, it's definitely going to have a direct impact on our sales figures because the fixed costs are the same. So that's where we're affected most … mother nature comes and plays tricks, I'd say.

Katerine-Lune: André: What do you think is the benefit of having a maximum amount of cash flow?

André: When you have maximum cash flow, you can do more, perhaps in terms of inventory management and buying supplies a bit in advance before prices go up. We're seeing a lot of price increases for various products. When you can do a little advance booking, when you have a good cash flow ratio, you can make strategic purchases for potential sales. To give you an example, we recently purchased cardboard boxes for a period of 3 to 4 months to make sure our price is frozen for the next 3 or 4 months during a peak period when we have slightly more sales. We did some booking to avoid being hit with a price increase before the time we needed the boxes. When you have cash flow, you can save money in the medium term.

Katerine-Lune: You're talking about the medium term, but if I understand correctly, you also have to have a short- and long-term vision to avoid running out of cash. Jasmin, do you have any advice for entrepreneurs who want to maximize their cash flow?

Jasmin: First, I'd take the time to draw up an annual budget with the account manager to find out the company's annual financing and cash flow needs and peak cash flow periods, so that I can make the line of credit available during those peak periods accordingly. I'd also keep some leeway in our annual budget for contingencies so that there is cash on hand to deal with them. With entrepreneurs, it's important to differentiate between cash flow needs and investment needs so that we don't finance long-term assets, such as machinery, equipment and tractors, out of the line of credit. Sometimes it's tempting when the cash is there. Instead of calling your account manager, you put the expense on the line of credit, but at the end of the season, the line of credit is no longer doing its job and may be a bit too high. So, it's important to talk to your account manager in order to finance the purchase of machinery and equipment and then keep the line of credit for operating cash flow. Also, if major unforeseen events occur, such as crop losses or loss of customers, it's important to inform your account manager so that a solution can be found for short-term cash flow problems. It will take some stress off the business owner and dispel some uncertainty.

Katerine-Lune: Valérie and André: Would you say that a line of credit is an essential financial product for you? Valérie

Valérie: Yes. When you're starting out in business especially, you have to have some security. If you don't have any cash on hand, you need a line of credit to keep things going. And, as I was saying, you also have to pay your fixed costs. In the leek-growing business, we start the leeks from seeds in greenhouses to be able to harvest them only in August before making the first sales. So, we have to pay for all the maintenance and seed purchases over a 6-month period, or as André says, the boxes, cling wrap and everything, and our employees' wages. Without a line of credit, it would be very difficult to be in business or to keep going.

André: Our situation is also a bit similar to that of Cultures de chez nous. May and June are the big sales periods for processed prepared salads. We also have months with higher sales. So, our lines of credit are essential to the company's continued operations; it's a plus to have a good line of credit. As in Valérie's case, there's seed to pay for; so it's important for our account manager to give us a bit of support to deal with our changing financial requirements.

Katerine-Lune: Let's talk now about profitability. Do all three of you have any advice or possible solutions for increasing a business's profitability in the agriculture sector?

Valérie: For us leek producers, profitability is perhaps a typical concern because, as I said, leeks are still a very marginal business line and not well known. Over the years, since the very beginning, it has really been about maximizing–sorry, increasing–profitability; it's all about machinery and equipment that we really had to invest in to be able to produce quality leeks and carve out market share for ourselves in the food supply chains year-round as well as ensure that our employees had work year-round. If you want to sell more than dozens of leeks for the company to be more profitable, you have to promote leeks. You have to promote leeks because people don't buy a lot of leeks, other than for soup. And our mission at Les Cultures de chez nous is to get leeks into every bag of groceries every week. We have a lot of work to do; so, that's why for us, yes, innovation is top of mind, but we also have to do a lot of work to educate people. You have to show people what they can do with leeks. That's why we ran an ad on TV and in magazines–it's very rare for a farm business to do that. We created the completementpoireau.com website to suggest some really good recipes. Innovation and education, it's all tied together.

Katerine-Lune: André, do you have any advice?

André: Yes, in our operation, every employee has a third person who can replace them. Each employee has a backup who can take over to keep operations running as usual. But we still have a challenge when it comes to managing employees. We're like everybody else; we have a shortage of employees, but we're always actively looking for people to hire for vacant positions.

Katerine-Lune: Jasmin, maybe you have some advice as well?

Jasmin: It's along the same lines as what André and Valérie said. I'd also encourage you to seek out partners and technical advisors who can help you with more specific aspects of the business to make it more efficient. Basically, it's important to know good people who can help you. Valérie said that innovation means keeping up with innovations in your business line. Automation and robotization are happening in all agriculture and agri-food sectors; they continue to be things you need to consider to maintain your productivity and stay competitive. There's also innovation, but I would also say to entrepreneurs that they should not be afraid to question how they do things or to reassess their production methods. Talk to other entrepreneurs about how you can improve your methods and your performance.

Katerine-Lune: We've talked today about investments, cash flow and profitability, but I'd like you to tell me about the people who operate farm businesses. What are some of the attributes that make a good agricultural entrepreneur?

Valérie: I think that agricultural entrepreneurs nowadays must believe in what they're doing first of all, then do their utmost to make their dreams come true. Of course, you have to have a vision and be bold. You clearly have to be bold. But nowadays, operating a farm business has also become so complicated. I think you have to demonstrate leadership, be inspirational for people, be very humble and be able to surround yourself with a team, because you can't function on your own, it's impossible. Then you have to make sure that your team has strengths that are different from your own because you can't be good at everything. That's what will help you go farther in your business.

Katerine-Lune: Is being an agricultural entrepreneur a vocation?

Valérie: Yes, I think so. It really requires a lot of effort and sacrifices, but at the same time, there are rewards. And when you're doing what you love to do, I think it makes a difference. It makes all the difference. You really have to like what you're doing. There are ups and downs and problems, as there are with everything. But yes, it's a vocation.

Katerine-Lune: André, in 3 words, what do you have to say?

André: You have to be curious, passionate and a good communicator: those are the essential attributes of a good entrepreneur, as well as being open to new things and innovation.

Katerine-Lune: Jasmin, what do you have to say to wrap up?

Jasmin: It's along the same lines as André and Valérie. I think they summarized it very well. I think a good agricultural entrepreneur is someone who knows how to put together a good team and delegate tasks. They also know their numbers, their production costs and the day-to-day reality of their business. Then, as someone said, they have to be innovative, willing to try new ways of doing things and willing to question how they do things.

Katerine-Lune: I'd like to thank the 3 of you for being here today. I think you gave us a better understanding of the main challenges in the agricultural sector and of what is involved in running an agricultural business or advising agricultural entrepreneurs. I hope mother nature will be on your side in the months ahead.

Valérie: Thank you.

André: Thank you.

Jasmin: Thank you.

Katerine-Lune: Libres échanges is presented by Desjardins Business. You can find all of the podcasts in the series on Spotify. My name is Katerine-Lune Rollet; thank you for listening.