Businesses across North America are facing a huge transition these days and the coming years due to demographics as well as mergers and acquisitions.

But this is nothing new - although it may be at a greater scale today.

“It’s always been a state of transition and that can be for a variety of different reasons,” said Dana Rosenberg, Managing Partner/Co-Founder of CQL Capital, based in Manhattan Beach, California.

“It’s always going to be a dynamic where these businesses are going to be for sale. We don’t think about whether there’s going to be a peak or trough on the number of businesses that could be for sale on a demographic standpoint. It’s a constant state of where we are because of a number of factors.”

CQL Capital is a middle-market private equity investment firm. The firm aligns itself with committed management teams, owners, founders and families, providing access to the capital, strategic and operational resources required to drive future growth and value creation. Its focus is on making direct equity investments in founder / family owned and operated businesses where they are seeking to partner with private equity for the first time.

“We focus mainly on family and founder owned businesses,” he said. “There are fewer and fewer businesses that get handed down to the next generation. We live in a different world than we did 50 years ago where that was sort of a natural transition where someone started a business and the idea was to leave the business to their kids. Now you have these platforms to be able to sell the businesses and I think a lot less have dynamics where you have children that want to step in to run a business,” said Rosenberg.

“It happens a fair amount because we focus on family owned businesses but at the same time the number of family members for that next generation is probably a lot less than it was 30, 40 years ago.”

Rosenberg is the conference chair for the upcoming Business Transitions Forum in San Diego on September 24.

The challenge of business owners today fall into two categories.

“There’s a need for liquidity for the founders and owners in a variety of different ways. It could be that most of their personal net worth is tied up in the business and it’s really hard for them to continue to grow the business given that is the primary asset in their family’s wealth. So it becomes very challenging for them to continue to put money back into the business to grow it. So a lot of times what they’re looking for is some level of liquidity to diversify some of the risks and allow them to unlock some of the cash flow in the business to continue to grow that business.”

Rosenberg said for another group of owners it may be a second or third generation business. And some of those generations are not involved in operating the business.

“That becomes very challenging as they grow the business because you can have a misalignment around the ability to grow that business for the same purposes. Those businesses are still designed to pay out dividends to owners as opposed to put that money back into the business in order to grow it through acquisitions, etc. A lot of what we see is the family member who may be the CEO of the business at this point, the one that’s still involved, really want to find a way to buy out the other owners who are not involved in the business.”

Since 2015, the Business Transitions Forum has been helping entrepreneurs learn about ownership transitions and opportunities for M&A (mergers and acquisitions). It has now expanded from Canada into the US market, starting in San Diego.

The Business Transitions Forum is evolving to reveal comprehensive strategies to grow businesses of all kinds, while still educating entrepreneurs on the role M&A can play in increasing shareholder value on both the sell side and buy side.

Entrepreneurs and leading mergers and acquisitions practitioners from both Canada and the USA, through the Forums, to learn how to:

• Increase market share and shareholder value
• Identify ways to grow and/or scale their business
• Learn about being acquired or acquiring businesses
• Discover how M&A can offer their business a path to growth
• Understand how M&A can create opportunities for personal wealth creation through an eventual transition

“The topics around this conference are going to help those business owners understand what the process is like and have a more realistic understanding of what their business is worth,” said Rosenberg.