So he began looking outside of the United States and discovered a surplus of talented but underworked I.T. professionals in Argentina. “I got 81 really qualified résumés, which blew me away,” he said.

He hired seven of the applicants, but instead of transferring them to Pittsford, just outside of Rochester, he let his new employees work from Argentina. “We had to figure out how to manage projects with people remotely,” he said. “And how do you communicate with them in Spanish?”

Almost 15 years later, Mr. Dandrea is still trying to perfect the relationship. He now has 128 full-time employees, including 72 in South America. Only 42 people report to the main office in Pittsford, and 14 work elsewhere in the United States. “It’s a lot of fun working this way,” he said. “But there are always challenges.”

While there are benefits to employing a far-flung staff — salaries and office overhead may be lower in other countries, for example — it can be difficult to get employees to work cohesively. The suggestions in this guide come from business owners who have tried.

HOLD PEOPLE ACCOUNTABLE Ken Cauley, founder of a video game news site, Kombo.com, said the hardest part was creating accountability. The company, which he sold to GameZone in 2010, was based in Detroit, but he worked with 10 employees and 30 freelancers in the United States, Australia, Canada, Honduras and Japan, among other places.

One frequent problem was missed deadlines. “Grand ideas wouldn’t work out,” said Mr. Cauley, now president and founder of Advanced Media, an online advertising company. “And you always had to figure out what happened after a problem occurred.”

His first idea, he said, was to throw money at the problem, thinking that if people were paid more, they would make more time to do the work. That did not help.

In 2006, four years after starting his business, Mr. Cauley decided his staff needed a set of black-and-white rules. He and his employees developed the “Kombo Bible,” a 40-page document that detailed every aspect of the company, including what to do when problems arose and the repercussions for making a mistake.

Soon after, people stopped missing deadlines and productivity increased. Thanks to the handbook, he said, employees knew exactly what would happen if they slacked off.

“If someone ended up getting fired, they knew they were getting fired,” he said. “The accountability issues pretty much dropped to zero.”

Kuty Shalev, founder and chief executive of Clevertech, which builds custom software and applications for wholesale distributors, financial companies and start-ups, has also had to deal with missed deadlines. His company is based in Woodmere, N.Y., and has employees in India, Israel, Pakistan and other places.

Mr. Shalev has employees post a daily goal on Yammer, an internal social network for businesses. His software developers also have to submit their code at the end of the day. If managers find something odd, they investigate.

But missed deadlines are not the worst of his problems. Occasionally, employees do not even show up. He now requires all employees to have cellphones, so he can track them down if they fail to report.

MAKE IT VISUAL Entrepreneurs have to understand and be sensitive to cultural differences, Mr. Shalev said. In other countries, for example, people often need days off to attend religious functions. Some of Mr. Shalev’s employees in Moldova and Ukraine deal with frequent blackouts — he has had to buy generators for some — and one Pakistani employee wanted a day off to sacrifice a goat.

Argentines, Mr. Dandrea said, really like their holidays. They often get one or two days off every month, and if a holiday falls on a Tuesday, he said, people often stay home on Monday, too. One time, a client had a problem on a Friday night, and no one got back to him until Wednesday because the Argentine project manager had two days off. “The customer was incensed,” Mr. Dandrea said.

He has learned to coordinate schedules across countries. If the Argentine office is closed, someone has to make sure colleagues in other countries fill in.

Sometimes, simple communication can be an issue. In some cultures, people say yes a lot — “but they don’t mean yes; they mean they heard you,” Mr. Shalev said.

He has spent long meetings talking about a project and assigning tasks only to get back work that did not reflect his instructions. The best way to get his message across, he has learned, is to “make it visual.” He uses Jing, a program from TechSmith that allows people to share screen shots, videos and images.

“Everyone can understand a photo or video much better than listening to words,” Mr. Shalev said. “That’s even true with staff and clients in the U.S.”

CONNECT YOUR PEOPLE When you see your employees every day, it is easy to tell if someone has the blues. But what if you only talk to them on the phone? “I’ve gotten two weeks’ notice and had no idea something was wrong,” Mr. Dandrea said. “There’s no griping at the water cooler that will get back to you.”

When employees are off-site, it is easy to ignore the “commitment conversation,” as Mr. Dandrea calls it, which is why he makes sure his managers have regular discussions with staff members. Managers have been taught to give a lot of feedback and even to ask directly how an employee is feeling. “We look for chinks in the armor,” he said.

He also uses an online recognition program called Potential Point that allows people to reward others virtually for a job well done. When someone in the United States nominates someone from Argentina for doing good work on a project, the entire company sees the nomination.

Michael Brody-Waite, chief executive and co-founder of InQuicker, a company that creates software that displays wait times at emergency rooms and doctors’ offices, often sends his Nashville-based employees to spend three days at the company’s other office — a coffee shop, technically — in British Columbia. “When they visit the guys in Canada, they end up surfing, hiking and snowboarding,” Mr. Brody-Waite said. “The idea is to be more natural with each other.”

WATCH YOUR OWN HOURS Perhaps the biggest problem with a far-flung staff is the temptation for the boss to work around the clock.

Mr. Shalev said it was hard to turn off when he knew there were employees working as he was getting ready for bed. The first few years running his company, he said, he often got caught up with something and did not go to bed until 3 a.m.

To avoid a 24-hour workday, Mr. Shalev asks his overseas employees to work as close as possible to 9 to 5 Eastern Standard Time. That means some people have to start working at 5 a.m. Others start in the afternoon, take time off for dinner and finish at night.

As much work as it has taken Mr. Dandrea to run a successful business across multiple countries, he said he had no regrets about his 1998 excursion to Argentina. “Working virtually,” he said, “gives us access to so much more talent.”

Article appeared in the New York Times on September 6, 2012.

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However, Mr. Penney is still saving for his golden years. While he may not want to spend all his time lounging on a beach, he does expect to slow down as he gets older. He may even purchase a Florida condo one day. “At some point I’ll want to take January and February off,” he says.

A lot of Canadians in Mr. Penney’s age group are starting to think harder about what they’ll do in their 60s. If this were a generation earlier, though, there wouldn’t be much debate – you’d retire at 65 and that was it.

“It’s really different today than it was for my Mom and Dad’s retirement,” says Daryl Diamond, president of Winnipeg-based Diamond Retirement Planning Ltd. and author of the recently released Your Retirement Income Blueprint. “Retiring at 64 was considered retiring early.”

Now people live much longer, so any money saved has to last for decades. Plus, Canada plans to effectively reset the age of retirement by boosting the eligibility age for the Old Age Security benefit to 67 from 65, beginning in 2023.

As ideas around retirement have changed, so have some of the ways to save for it.

Mr. Penney started saving when he was in university. Like most savers back then, he invested in a registered retirement savings plan. But at 38 he ditched that account – he expects to still be in the top tax bracket when he’s older, so there was no benefit. While he still holds money in his registered account, he’s currently putting about $5,000 a year into his tax-free savings account.

Most of his savings, though, are in a non-registered account. He owns exchange-traded funds, which he typically trades every 25 days; only 15 per cent of his money is set aside for long-term holdings. However, the money he’s trading is growing, he says.

While Mr. Penney is a more savvy investor than most, he has become slightly more conservative as he’s gotten older, moving out of Canadian small-cap stocks and into more diversified ETFs.

Jason Round, head of financial planning support for RBC Financial Planning, says that Mr. Penney is correct to move into more conservative investments, even if he’s still mostly holding equities.

People who are 45 need to start thinking about how much they’re going to need in retirement. That should then inform how much risk they can take on, he says.

In the past, the rule of thumb was that people needed to become more conservative with their investments as they aged. Mr. Round says that more diligent savers may be in a position where they can separate their accounts into two parts. There could be an account that’s used to fund retirement, which would be invested more conservatively, and another with excess cash that could be more aggressively invested in equities.

Many experts still say that younger people should be more weighted to equities – their time horizon is longer so their portfolio has time to recover from a downturn – but even that rule isn’t as black and white as it once was.

These days, people in their 30s need to save exorbitant amounts to buy a house, and many are paying for child care, schools and other family-related expenses. While everyone should be thinking about retirement, says Mr. Round, realistically, younger Canadians are just trying to pay the bills.

Instead of focusing solely on retirement, 20- and 30-somethings need to plan for specific goals. “The most important thing is to think about what you want to achieve,” he says. “That could be buying a first home or finishing up college. It’s about stability and getting on a solid path.”

David Aeri, a recently married 30-something Toronto-based IT manager, is aggressively paying down his mortgage, and he’s investing in an RRSP. He puts money away every month and increases the total amount by $25 every year.

While he admits that saving could become more challenging as children and other family demands come into the picture, he makes sure that no matter what happens he budgets and sticks to a financial plan. That should keep him on track as his household expenses increase, he says.

Mr. Diamond says that a lot of people still have trouble saving. Many clients, he says, have to work past 65. But when it does come time to retire, he suggests people use only about 5 per cent of their assets to live on. Some will have to draw down their savings; others may be able to invest enough – through dividends or higher yielding bonds – to generate a 5-per-cent return.

No matter what age you are, though, it’s important to know that retirement has changed from a generation ago. The only constant is the earlier you begin saving, the better off you’ll be.

“I’ve been saving since university,” Mr. Penney says. “If I ever do give up work, at least I’ll have enough to be able to choose my own path.”

Demographic decisions

Investing advice by age group:

18 to 34: Keep your golden years in mind, but focus on goals such as buying a house. Invest more conservatively with short-term savings and more aggressively – in equities – for longer-term retirement savings.

35 to 54: Start thinking harder about what retirement is going to look like. The closer you get to 55 the more concrete a plan you should develop. Move money that you’ll need in retirement into more conservative securities.

55-plus: Plan a retirement date. Invest more heavily in retirement savings accounts and figure out exactly how much you’ll need when you stop working. Put the money you’ll need in fixed-income vehicles, but continue growing any extra cash.

From Globe and Mail’s May 23, 2012 issue.

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That would have proven to be wise the last few years—the index dropped 12.14% between May 1 and Aug. 31 in 2011—but a new report, released at the end of April, says it’s better to hang on to your investments during the summer.

According to New York-based investment research firm Wolfe Trahan, the S&P 500 has been down during the summer just 37% of the time since 1948. Between May and October the index has averaged a 1.37% return.

Stephen Lingard, managing director of Franklin Templeton Multi-Asset Strategies, says that while the summer is weaker than other time periods, the “critical point is that it’s still positive.”

“If you do the math it isn’t a bad time to be involved in equities,” he says.

Franklin Templeton crunched the numbers to see how the S&P/TSX Composite Index performed between May and October and discovered that since 1950, the index’s cumulative average was 0.37%.

Clearly, you won’t get massive returns over the summer, but these numbers prove that there’s no reason to liquidate your portfolio either.

In fact, Lingard likes to buy during the summer, especially when the market drops. The more people who do get out in May, the lower company valuations go and the more opportunities open up. “I hate to give advice to sell,” he says. “We’re carrying a little more risk in our portfolio to take advantage of what we see as better economic fundamentals and strong valuations going forward.”

Michael Sprung, president of Toronto-based Sprung Investment Management, is also on the prowl for cheap buys. He says that before the recession, the summer was relatively quiet, but now he barely gets a break.

These days, too many opportunities present themselves, so selling can be a mistake. “The fact is, if you’re not paying attention, you might miss those chances,” he says. “Even if the market drops, if you have confidence in a company and its long-term prospects, the price will come back.”

While some investors opt to sell, others prefer to spend July and August relaxing at the cottage rather than watching the markets. For that group, it’s important to hold investments that protect your portfolio from any potential drops.

Jon Palfrey, senior vice-president of private clients and foundations for Vancouver-based Leith Wheeler Investment Counsel, suggests holding high-quality brand name stocks that pay a dividend. Payouts are often a sign of company strength and well-known large- or mid-cap names—like a McDonald’s or Coca-Cola—don’t generally fall as hard as riskier small-caps during volatile periods.

“You can worry less about companies that are well capitalized, well priced and well run,” he says.

If you’re relying on income to cover expenses, Palfrey says to buy some short-term bonds that mature after a month instead of selling stocks. Match up your assets to your liabilities, he says, so you’ll have enough money after that bond comes due to pay any bills. “If you can match correctly, you don’t have to worry about selling at the wrong time,” he says. “You also don’t have to worry about raising money in the market if stocks have a tough August.”

In some cases though, it does make sense to sell before taking off. Sprung says that investors holding commodity ETFs can’t ignore their investments. In many cases, these ETFs don’t track their index point-for-point. There’s often a large tracking error—the index can be up, while the ETF is down—which can cause people to lose a lot of money. Investors must regularly rebalance a commodity ETF portfolio; if you ignore it for a few months you could find yourself deep in the red.

There is another approach investors can take: invest for the long-term. If you’ve got a portfolio filled with stable assets, such as brand name stocks that you plan to hold for years, then what happens between May and October won’t matter much over the long run. “Longer-term investors don’t have much to worry about,” says Sprung. “The stocks they’ve selected should be relatively secure so there’s no need to be concerned about some temporary shock.”

Appeared on MoneySense.ca on May 17, 2012.

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She was excited that her business, Plum Benefits, which sells discounted entertainment tickets to corporate employees, would now be able to tap into resources that only a larger operation could provide, but she was also nervous about going to work for her parent company. The acquiring business, the Shubert Organization, wanted her to stay for at least a year to help with the move and to continue running her business. But she had heard from friends who had sold companies that hanging around after ceding control can be a nightmare.

“A lot of my friends said this was going to be the worst year of my life,” she said.

Even though she knew she would have to let go, Ms. Mendelson found it difficult to play by someone else’s rules. While she stresses that the relationship was mostly positive, she struggled with how long it took the new company to make decisions and with not having a say in overall management. She had been brought on board to run her own company — now considered a division — and that was it. “I wasn’t totally surprised,” she said, “but there were moments of real frustration. And after a year, I chose to leave.”

Ms. Mendelson’s experience is not unusual. Lots of business owners remain involved after selling their companies. While the transition from entrepreneur to employee will always be tricky, owners who have had the experience say it is important to negotiate well — and be prepared for the worst.

KNOW WHY YOU ARE THERE
Last year, when Mike Kahley, founder of Grizzaffi Darby, an employee benefits consulting firm, sold his company, he understood that he would have to stick around. “The value of what we sold was tied to the value of myself and my business partner,” he said. Knowing that the acquiring company, Lockton Dunning Benefits, based in Dallas, needed him helped ease the pain of not being the boss. More important, he knew exactly what his role would be.

Before the sale, Mr. Kahley, now a senior vice president at Lockton, negotiated his new role. While he made sure that he would maintain control over his business — he is responsible for turning a profit and has some hiring and firing duties — he accepted that he would have limited say about the company’s direction. He conceded that he would have liked to play a greater role, but that was not part of the contract he signed. “I have a voice,” he said, “but I have no vote.”

Obviously, the negotiation phase is critical. That is when everything — including compensation, vacation time, what will happen to employees and how soon the selling owner will be allowed to walk away — gets determined. During her negotiations, Ms. Mendelson made sure she would have the option of leaving after a year. She also agreed on her revenue goals and on how hiring and firing decisions would be made. The contract, however, did not specify a role beyond running her own division. And when she tried to offer big-picture ideas, she said she was not given a warm reception.

THERE WILL BE CHALLENGES
Even if you think you have negotiated the best possible role, you should be prepared for frustrating moments.

In 2005, Richard Humphrey sold DrinkWorks, a company based in Newport Beach, Calif., that made custom cups for companies and theme parks, to Whirley Industries (now Whirley-DrinkWorks). He would maintain responsibility for the DrinkWorks division, its staff and revenue, and he would also become a member of Whirley’s five-person executive team. Unlike Ms. Mendelson and Mr. Kahley, he was supposed to help guide the overall business. A month after joining the new company, he went on a staff retreat where he met with the rest of the executive team to discuss a vision for the company. He left thinking they were all on the same page.

About a month later, he learned otherwise. Mr. Humphrey was leading the design of a new product and came up with an idea for a different kind of drink lid. He explained what he wanted, but the engineers came back with an existing design. When he asked why, he was told that the chief executive had made the call. “He just overrode my decision,” Mr. Humphrey said. “It started to sink in that the old way of doing things was deeply embedded,” he said. “When we looked to see change happen, the staff would say, ‘Are we really supposed to be doing this?’ ”

That happens a lot, said Josh Patrick, founder of Stage 2 Planning Partners, a consulting firm based in South Burlington, Vt. Mr. Patrick has helped many entrepreneurs sell their businesses, and he has also sold one of his own. Sellers often forget that they have to help the new owners reach their goals, he said, and the new goals will almost always be different from the old ones.

The only way to overcome these challenges, Mr. Patrick said, is to cede control. He said he had seen only a handful of entrepreneurs have successful careers with an acquiring company. When it does work, he said, it is because they become good soldiers: “They make the mental switch that they will become an employee and be part of the team.”

YOU HAVE A CHOICE
When Mr. Humphrey was asked to join Whirley Industries, he said yes. He wanted, he said, to make sure the company got its money’s worth. He also wanted to make sure his employees were looked after. And he was ready to work fewer hours and take a vacation, which he said he had not done since starting the company in 1998.

When sellers stick around, Mr. Patrick said, there are usually two reasons: They want to make sure their employees are treated well and they have big egos. Entrepreneurs love being courted by large companies that tell them how great they are — “it’s pretty heady stuff,” Mr. Patrick said.

But owners can say no. Ultimately, Mr. Patrick said, the buyer wants critical employees, including the seller’s managers and top sales performers. They do not really want the old boss. “These key people know how to be employees,” said Mr. Patrick. “Owners don’t want to be employees.”

When Mr. Patrick sold his vending and food services company in 1995, he did not join the new business, even though the new owners said they wanted him. “I said, ‘What do you need me for?’ ” He knew that working for someone else would be a disaster, so he took the money and ran. Instead of staying to oversee the transition, he told his employees that if they were fired within the first six months, he would pay them a “stay bonus” out of the selling price.

Staff was also a big reason Ms. Mendelson joined her acquiring company. Her employees were excited about the move — they would have more resources, better benefits and better prospects for advancement — but she still wanted to help them integrate into the new operation.

Seeing her staff succeed, she said, has been worth the frustration. The other thing that helped was starting to think about her next company. “The focus on my future kept things in perspective in the moments I needed to be patient,” she said. “Now I want to try again.”

Appeared in the May 17 edition of the New York Times.

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The Toronto-based trader didn’t buy the company because he thinks it will bounce back. On the contrary, it’s the poor performance that’s attractive. The low stock price, he says, makes it ripe for a takeover.

Mr. Ser has a history of buying companies for the takeover potential. He says that between 2002 and 2004 he made a lot of money by purchasing junior mining stocks that he thought would eventually get bought out. He’d spend between $5,000 and $10,000 on a business and he’d often make three times that, if not more, on a sale.

This strategy wasn’t always successful, but he says he has made more than he lost. While he doesn’t buy for mergers and acquisitions as much as he used to, every so often he’ll revisit his old investing tricks.

Buying a company purely for the M&A play is a risky strategy, but people do it – just look at how stock prices rise on the rumour of a purchase. If you do want to play this game, the key is to buy a company before there’s any takeover talk. “You look to buy when no one wants it,” says Mr. Ser, an independent trader, investment coach and author of A Beginner’s Guide to Exchange Traded Funds.

Peter Imhof, an investment strategist with Sprott Asset Management, says that while he never buys companies just to make money on the buyout, he’s found that the businesses he likes are often scooped up.

He buys companies that are undervalued but still have solid operations and are still earning money. “If I think the valuations are cheap, then others will think it’s cheap too,” he says.

Companies that get bought out, he says, are ones that have low price-to-earnings ratios but high earnings. For example, a company with a P/E of 10 times earnings and earnings growth of 20 per cent will be attractive to buyers. “Eventually, the market will reward it with a higher multiple,” he says.

In today’s market, a lot of good businesses are trading at low valuations and, because we’re in a slow-growth economic environment, one of the only ways for companies to grow is through acquisition.

Over the past 12 months, four companies that Mr. Imhof owned have been bought up, and he expects more to come. “A lot of large caps are flush with cash,” he says. “And the smaller ones are growing more rapidly.”

Brian Huen, a managing partner with Toronto’s Red Sky Capital, has seen six of his companies sell to larger businesses over the past 12 months. But, like Mr. Imhof, he’s not buying stocks just to make money on a merger. While it’s always great when it happens – premiums can be 30 per cent or more – he, too, buys strong companies with the hope that the stock price will rise, takeover or not.

Playing the acquisition, Mr. Huen says, is risky for a number of reasons. The biggest risk is that a deal doesn’t occur and the stock price falls. It’s even more troubling if the company’s management is focused on a takeover. “You don’t want the business to be set up for a sale,” he says. “They’re just trying to make a quick buck instead of running a long-term business.”

Another issue is the still volatile economic climate, which can have a significant effect on junior mining companies. If you buy a junior miner – this sector is often a favourite for M&A speculators – and commodity prices fall, the chances of a takeover drop, too.

Whatever you do, don’t jump in on a rumour or after a takeover bid has been announced. The price almost always jumps immediately after an offer has been made, so you likely won’t get much more of a premium if that transaction does go through.

And it can be a big “if.” When BHP Billiton made a bid for Potash Corp. in August of 2010, Potash’s stock price soared from about $39 to $52 in three days. The deal didn’t happen; now the stock price is back to where it was two years ago.

Mr. Ser is hoping that his latest M&A play will result in a big payday, but he knows there are no guarantees. He says he’ll hang on to the stock for a little while longer, and will consider selling if the price drops another few dollars. But if the price stays where it is, then he’ll wait until the company gets bought out.

“RIM looks good,” he says. “Based on what I’m seeing right now I think investors will eventually get a 50-per-cent premium.”

Appeared in Globe and Mail’s May 16, 2012 issue.

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That’s St. Party’s, not St. Paddy’s, and it’s a deliberate takeoff for St. Patrick’s Day.

Created two years ago by Oxford Beach founder Billy Hennessy, the event occurs on St. Paddy’s Day, and the last one attracted 8,000 celebrants to Toronto’s St. Lawrence Market, he says.

Between beer company sponsorship and sales of booze and food, the event generated revenues of more than $300,000, he says.That equals almost a third of the $1-million the 13-employee company expects to generate in 2012.

Mr. Hennessey believes there’s more where that came from, and he now wants to take the event to other cities, capitalizing on the St. Party’s Day name he says he has trademarked.

He could do it himself but believes he’ll have more traction if others do the heavy lifting. The options he is weighing: to licence the name to another event company or to an alcohol company. So far, he says, four beer companies, three event companies and two liquor companies have approached him.

He sees pros and cons to both. If a booze company had the licence, he foresees the potential for rapid growth — but he worries that he’d have less control, and fears that an alcohol company might make a big initial splash but not carry on year after year.

An event company, on the other hand, he thinks might bring slower growth without a big-brand name behind it, but he believes he might have more control and more potential for growth over the long term.

Mr. Hennessey would like to see a St. Party’s Day event in four new cities next year – Halifax, Montreal, Calgary and Vancouver – and if each city hosted one, he sees potential for fourfold growth in revenues for Oxford Beach. That, of course, would greatly depend on licensing arrangements, among other things, but it’s the number he’d like to achieve.

While anyone could host a St. Patrick’s Day party, Mr. Hennessey says he has already put in a lot of the work that it takes to get something of this scale going. The licensee would be buying what he calls his “event recipe.”

“It’s not easy to execute an event of this magnitude,” he says.

The Challenge: “Which is the best option for growth?” he asks. “Our main goal is market penetration, but we’re not sure the best way to licence the name.”

THE EXPERTS WEIGH IN

Dave Zimmel, Calgary-based vice-president of private enterprise with business advisory firm MNP LLP

If you get involved with the beer or liquor companies, you’re selling yourself into a global market, and that can be quite enticing. While there may be less control, there’s a big reach to what they’re doing.

The biggest question he has to understand, though, is what he is getting himself into. He needs to project what this type of deal might look like [in] a year and five years. The minute he walks down the road with the beer companies, it’ll be hard to pull back.

Find out where you fit in to their marketing developing plan. Understand the revenue picture and what royalties will be provided. Ask how his party fits into their short, medium and long-range plans. Events like his always have a life cycle to them — I guarantee you it won’t be there forever. So he has to figure out which option will give him the best run.

Sandy Huang, president of Vancouver-based business consulting firm Pinpoint Tactics

The first thing he needs to do is run a financial simulation to see what he’d get by licensing through each option. Generally, a company would licence a name for between five and 10 years. So assume an alcohol company wants it for 10 years and plans on doing five different things with it, then project what that revenue will be. He’ll have to find out from the alcohol company how much revenue they’re anticipating from the event.

He actually may have more control than he thinks when he licenses to a beer or liquor company. It’s all part of the negotiation. Make sure he’s involved or go to a different company. Maybe he can get growth, control and revenue.

It’s a similar exercise with the event -management company. I can’t tell him which option is better. He needs to run the numbers – numbers can’t lie.

Brian Scudamore, founder and chief executive officer of Vancouver-based 1-800-Got-Junk LLC

I’d go with the beer company. They [have] deep pockets and can scale up quickly and they want something they can use to go against Guinness, which is associated with St. Patrick’s Day.

But what he needs to do is weigh the potential profits against the effort it takes to make that money. Licensing the party to other event-management companies could be a lot more work – he might want to consider franchising the event rather than just licensing, which is what we did, if he goes that route. With the beer company, he could just licence the name and not be involved. He has to decide how much effort he wants to put in.

THREE THINGS THE COMPANY CAN DO NOW

Put together projections

Project what different deals might look like, including revenues, royalties, and short-, medium- and long-term plans. Key is to also figure out how the event would fit into a company’s marketing plans and what kinds of promotional commitments would be given.

Negotiate

If control is important, negotiate a deal to retain oversight. Go with the company, and the option, that offers the most involvement.

Consider franchising

Franchising to other event companies – rather than just licensing – could be a way to retain control and maintain a percentage of profits.

Appeared in Globe and Mail’s May 16, 2012 issue.

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This has been a busy year for Brian Pukier, a partner with law firm Stikeman Elliott LLP and head of its Toronto mergers and acquisitions group. After a slow summer last year, the M&A space is finally back to normal, he says. “We’d always like more deals, but our firm is keeping busy,” he says.

Mr. Pukier’s firm does a lot of work in the resource space; he’s seen a lot of deals done in mining, energy and oil and gas, in particular. He points to high commodity prices, demand from Asia and higher overall confidence in the economy as reasons for the increase.

M&As won’t return to 2006-2007 levels, when everyone was making deals, he says, but the rest of the year will only get better. “As long as banks are lending, which they are, then I think we’re going to stay at least consistent,” he says.

While this country’s M&A market is doing nicely, the same can’t be said for the rest of the world. Global M&A activity last quarter was down 23 per cent year-over-year, according to Dealogic, a London, U.K.-based company that helps banks analyze capital markets. While volume reached $574.2-billion, it was the lowest quarterly figure since the third quarter of 2009 and the slowest start to the year since 2004.

Around the world, the oil and gas sector, followed by the mining sector, were the two busiest industries – the mining sector hit a quarterly record with $71.4-billion worth of deals. Because resources make up a large portion of Canada’s market, it’s easy to see why Mr. Pukier hasn’t noticed a slowdown.

In fact, Canada was one of the few countries that Dealogic tracked in which the value of M&A deals increased. While the number of deals fell by 10 per cent year-over-year in the first quarter, the value of those transactions rose to $44.7-billion from $26.7-billion.

Norman Raschkowan, executive vice-president of investments for Mackenzie Financial Corp., also thinks there will be more activity – in Canada and globally – in coming months. Corporate managers, he says, are feeling better about the economy. “That makes it easier for them to go ahead with acquisitions,” he explains.

Around this time last year, people were worrying about a Greece default and a double-dip recession. But with better employment numbers in the United States, improving housing data and fewer worries about a European meltdown, the double dip fears have mostly subsided, he says.

It also helps that the U.S. Federal Reserve has committed to keeping interest rates low until 2014. Bottom-basement rates make it less desirable for companies to keep their dollars, which they’ve been amassing, in cash. “A lot of companies have a lot of money,” says Mr. Raschkowan. They can either grow through acquisition or, he says, “leave their assets in cash and have it yielding nothing.”

Adley Bowden, director of research for Seattle-based PitchBook Data Inc., a company that tracks private equity and venture capital deals, also thinks we’ll see more M&A activity in the coming months, especially from the private equity sector.

U.S. private equity firms, he says, have about $425-billion worth of investments that they must spend within three to five years. “That’s a lot of cash,” he says and these firms have been holding onto that money for a year or two. “There’s a powder keg of money and people trying to do deals out there,” he says. “So the last half of the year will definitely be better than the first.”

Mr. Bowden points out that, since the recession, it’s taking longer to close a deal, which is one reason M&A activity has been up and down over the last year.

Companies are more diligent, asking more questions and taking a closer look at financials than they did before the meltdown, he explains. It used to take a quarter to close a deal, now it’s between six months and a year.

While Mr. Bowden thinks every sector will benefit from increased M&A activity, Mr. Pukier says Canada’s telecom space could see more activity than most. Loosening foreign investment restrictions, he says, could see bigger international companies buy out some domestic telecoms.

Whatever happens, Mr. Pukier will likely be working around the clock for a while.

“We’ve had a pretty good first quarter,” he says, “and as long as the credit markets stay healthy and resource prices stay strong, we’ll have more good quarters, too.”

Sidebar: M&A activity

While other countries saw the number of deals and the value of transactions fall in the first quarter of this year, Canadian M&A volume was the highest it’s been since the third quarter of 2008.

According to data provider Dealogic, the oil and gas sector led the way with $16.3-billion worth of activity, the highest quarterly volume since late 2009.

Six oil and gas-related deals worth $1-billion or more were announced in the first quarter of this year, with the largest being Pembina Pipeline Corp.’s $3.7-billion bid for Provident Energy Ltd.

Dealogic also notes that RBC Dominion Securities Inc. was involved in the most deals – 19, worth about $20-billion – while TD Securities Inc. came in second with 14 deals worth about $16-billion.

Appeared in Globe and Mail’s May 3, 2012 issue.

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But it’s a limited market. To keep growing, the company’s founder and president, Mike Brcic, is for the first time considering offering its services to more novice riders.

His concern: How to expand beyond his niche without diluting the brand and reputation the company has built up.

Mr. Brcic’s company, which has one other full-time employee and also works with about 25 guides worldwide, offers cyclists the chance to tour exotic locales, from Mexico to Peru to Slovenia.

The trails are tough, so if he were to market to newbies, he’d have to offer much easier courses. And if he did that, he worries that his company would be taken less seriously by experienced clients.

“Our trips are for skilled mountain bikers,” he says. “People come for the adrenalin component, and that’s what people know us for.”

It’s a bind: Mr. Brcic wants to keep growing his company, which this fiscal year expects to bring in revenues of about $550,000, up 26 per cent from the previous year.

He wants to hit $1-million but, with such a narrow market, the only way he thinks he can do that is by opening up to a wider clientele, meaning cyclists with less riding experience.

He’s also not sure how best to turn on new clients without turning off the core customers he already has.

He has thought about creating a separate brand, but that could be a lot of money and work. Another option might be to partner with another tour organization, but then he’d have to split the profits.

“We’re known for challenging trips and, if these beginner trips pop up everywhere, people might wonder if we’re the company for them,” he says.

The Challenge: How can Sacred Rides target a wider range of customers without harming its core brand?

THE EXPERTS WEIGH IN

Gail Walker, principal at Toronto-based Atticus Management

He needs to stick to his core message that he’s serious about mountain biking. In other words, he can’t become a bike tour group; he needs to remain focused on mountain biking.

His site already has the ability to search for trips based on experience, and I wouldn’t move that. But put in a message that his company will match riders’ skills to appropriate trips, so the serious riders can be reassured that the couch potato won’t be joining them.

He could recommend that beginners complete a Canadian skills camp – he already offers weekend camps – so his new customers at least have some experience biking. That promotes his local camp, too, while allowing people to assess if they’re up for longer trail ride. Ultimately, he needs to be really clear on what he stands for and talk about specific experience levels and specific trips.

Peter George, chief executive officer of Winnipeg-based branding agency McKim Cringan George

The first thing he needs to do is really understand what his current customer base would think of that. Talk to his existing customers and see if they really would be turned off if he offered beginner rides.

It’s difficult to start a new brand. That means doubling efforts required to promote the company. He’ll need two sets of business cards, two websites, two sets of social content — it’s an awful lot of work.

He could more easily include it in his existing brand. He should use his existing brand as a selling point. Say, we do this for the best mountain bikers in the world, so we know how to look after you perfectly. They also need more information on the site, like videos of rides and pictures of their tours. People can then look at that and know what to expect.

John Gunter, general manager of Winnipeg.-based Frontiers North Adventures Inc.

We’ve been selling high-yield tourism products for almost 30 years. Our core business is offering trips to people who want every aspect taken care off.

After the recession, though, we found that there was demand for trips at a better price point. So now we also sell …discounted trips under our Tundra Inn brand, which is different than our other, higher-value trips. We never offer discounts under Frontier North and we didn’t want to deteriorate the value of the brand.

But here’s where the strength is: We own all the infrastructure, which we use for everything we offer. So we get a good return on our assets. We’ll find ways to use an asset multiple ways.

He shouldn’t scramble to reinvent himself. I’d encourage him to retain the value he’s built up in his existing brand and sell his new stuff under a different name.

THREE THINGS SACRED RIDES CAN DO NOW

Talk to existing customers

Find out from core customers how they’d view a move to open up to less experienced riders and whether business would be compromised.

Clearly differentiate

Keep the core focus but offer rides to match riders’ skills so experienced bikers won’t worry about being joined by less experienced ones. Add pictures and videos to the site to further highlight differences between beginner and advanced trips.

Weigh pros and cons of creating two brands

Using the reputation he’s already established could be a selling point and is a lot less work and money than creating a new brand. But a separate brand allows clearer differentiation. If he does create a separate one, leverage existing assets. Use the same staff and equipment, for instance, to make two companies more economically viable.

Appeared in Globe and Mail on May 2, 2012.

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