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Gloomy pundits and unfavourable macro-economic news can lead business owners to shelf plans to sell their companies, but the smart ones don't try to time the market, nor do they wait to be courted. They actively seek out buyers.

They also watch for micro signals within their industry because the implications of small shifts in one area can signal bigger changes ahead.

Spots of activity are happening across the ethnic food industry in Canada, which is highly fragmented, with a wide scattering of companies making revenues from $10-million to $100-million. These owners are often running lifestyle businesses and they serve a niche market, such as tropical fruit drinks and spicy snacks for Asian customers.

The range of consumers clamouring for exotic tastes such as coconut water or tandoori-barbeque flavoured chips is expanding. Big companies, including Pepsi and Loblaws, are private-label innovating in this segment. Owners of ethnic food companies are finding their products moving from the back shelves to front-and-centre at the big-box retailers and gas stations to catch the consumer eye.

There are few large ethnic food players in Canada to keep a good balance of power with the corporate retailers and wholesalers who have been consolidating. The opportunity is ripe for a large company to roll-up the smaller ones and create a significant ethnic food business.

The economy continues to make it a struggle for any company to increase revenue by building capacity through its own efforts. Buying smaller businesses as "add-on" acquisitions is an attractive strategy for organizations that want to boost sales. Larger buyers can acquire smaller companies at lower risk because they bring a niche client base that would take years to develop.

As the economic slowdown continues, there has been an increase in the drive for acquisitions – sellers of ethnic food companies have a chance to turn this situation to their advantage. If they identify the major players in their industry and look at the acquisition activity closer to home, they can create a sale opportunity.

There are many moving parts for a seller in a fragmented industry such as ethnic foods, and to suggest the complexity of the selling process can be reduced to a handful of points is a risky proposition. With that caveat in mind, a seller should start by asking three questions:

1. What is the buyer seeking?

As management guru Peter Drucker has said: "The purpose of a company is to create a customer." If you understand your target buyer's customer focus and figure out what it is trying to offer consumers, you will gain insights into how your company can add something unique to that buyer.

"With ethnic foods, would the buyer be interested in adding to their product mix and bringing something new to their consumer's table?" asks Kamal Baig, former CEO of a tropical drinks company in Toronto. "When you have products with a unique niche, this is a powerful addition of loyal consumers, and there could be the potential to scale up the amount sold."

Perhaps the buyer's larger distribution network would give your innovative products exposure to a new set of consumers while refreshing a brand?

2. How would a buyer look at my business?

How would your business fit into the buyer's company? Be able to explain the synergies your firm would bring and how these would benefit the larger, platform business.

For example, will there be efficiencies if manufacturing is combined?

3. How can I know what my business is worth?

Your business is worth what a buyer will pay. Sellers often make the fatal mistake of conducting serial negotiations, which is a recipe for a poor valuation.

Jacoline Loewen is a director at Crosbie, which focuses on succession advice for family businesses and closely held small to medium-sized enterprises. Crosbie develops customized strategies, particularly in relation to M&A, financing and corporate strategy matters. Ms. Loewen is also the author of Money Magnet: How to Attract Investors to Your Business. You can follow her on Twitter @jacolineloewen.

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