When a business owner is ready to retire or no longer has the capacity to operate an enterprise, a timely succession is needed to preserve the business and its contribution to the community. Business Conversions to Social Purpose Organizations (SPOs) are a viable option for successful business continuation.
When a conventional business is acquired and restructured to a SPO, this is called a Social Acquisition or a Business Conversion. Today, more and more Canadians agree that social considerations should be prioritized over economic growth.
The pandemic has highlighted many looming social, environmental, and cultural issues across Canada that must be addressed, including:
- The need for Indigenous decolonization and reconciliation
- Disproportionate impacts of financial stress on members of equity-denied groups (BIPOC and other racialized groups, members of the LGBTQ2+ community, people with disabilities, women, and youth)
- Housing affordability, poverty, and economic inclusion
- Environmental degradation and climate change
(The Legacy Leadership Lab Final Report, 2021)
Examples of businesses that have pursued the conversion process to become a SPO >>
Although these problems are not new, the pandemic has brought these challenges into mainstream discussions. From this, we acknowledge the need for creative and sustainable approaches to remedy these dilemmas.
The Government of Canada’s Social Innovation (SI) and Social Finance (SF) Strategy recognizes the need for SI that catalyzes community-led solutions to solve our most complex issues. Accordingly, this strategy highlights that Social Purpose Organizations (social enterprises, charities, non-profits, for-profits, co-operatives, etc. with a social mission) are uniquely positioned to mitigate these dilemmas.
SPOs represent both a solution to our business continuity issue and leveraging of the social economy. SPOs allow Canadian communities to work towards combating our most complex issues through re-aligning the structural, financial, and productive capacity of a business towards a social goal. Thus, the coming wave of business owner exits becomes an opportunity to not only prevent service loss, but to accelerate social entrepreneurship efforts in Canada. This will contribute to solving Canada’s multi-faceted issues, by repurposing and repositioning conventional businesses to rectify our most pressing dilemmas.
The situation also presents an opportunity to connect exiting owners to members of equity-denied groups (EDGs). This is the key to improving financial stability in these communities, diversifying the Social Purpose Organization space, and creating lasting social impact by building on values of supplier diversity, inclusion, accessibility, and cultural advocacy.