We all know the big guys. The Thomsons, the Irvings, the Bronfmans, the Westons – billionaire brands whose very names have become synonymous with their family-owned companies.

But what about the smaller guys? Mom-and-pop small businesses quite literally keep Canada’s economy moving. Research from the Alberta Business Family Institute showed that:

• Family businesses contribute 60% of the Canadian GDP.

• Employ six million workers.

• Are behind 55% of all charitable donations.

• And create 70% of North American jobs.

As Harvard Business Review reported recently, “Family companies that have persisted over generations despite changing conditions strive for operational excellence, but not exclusively. They also are skilled at migrating to new value-creating activities and at leaving activities and practices that destroy value. They don’t become stuck in traditional businesses or outmoded practices. Some, after exhausting growth opportunities in their core business, diversified into different industries. Some experienced their industry maturing and consolidating around them and decided either to stay and acquire competitors or sell their outflanked business and redeploy assets. Some have parried the disruption of technology or regulation. Such adaptations are profoundly informative.”

And that’s exactly Fayez Thawer’s story.

Digital Networking Via LinkedIn

I met Fayez on LinkedIn (my new favourite online place), one of the many incredible entrepreneurs and business owners I’ve connected with on the platform, people with fascinating stories to tell. And as you know, my goal here is to go out of my way to share these stories with all of you in the Self Made Nation!

Fayez dreamed of a life in biomedical engineering, studied biology and computer science, ended up with a sweet gig at the Department of National Defence in nuclear radiation safety…

and is now a second-generation hotelier.

Wait. What??

Yup – he took a 50% pay cut to work for his father, who needed help with the family business. Originally, just for a “short while.” LOL

Families. They sure can suck you in.

Though only the second generation at Tasico Hospitality, a family-owned hotel ownership and management company, he’s helped the business adapt and diversify. Today, they operate five hotels in Canada, three of them right here in Ottawa, and two in Toronto; a large Toronto-based convention space and have also expanded into the US.

I wanted to get to know Fayez better, so I invited him to guest on “I’m a Millionaire. So Now What?” Here’s a bit of what we talked about.

From Bioengineering to Biochemistry to Hospitality…?

“You know, today we’re sitting here having a conversation about entrepreneurial endeavours and what’s next in life, but I think fundamentally family and making the right decisions for your family lead you down a road that doesn't necessarily have to take away from business pursuits or entrepreneurial pursuits. So, at the time, my parents started thinking about what was next for them. They had come to the conclusion that now that the kids are educated, we don't need to be sweating the way we are. Their goal was to sell the business. Now, a traditional mum and pop isn't run, again, most of your listeners know, as a financed asset. Our thought process was, how do we raise the value of the asset prior to selling it? Well, let’s franchise it. So, my father embarked on this journey. And then it came to the computerisation of the entire business. It was for that purpose that my mum actually asked me to come back and train the staff. I mean, a lot of these staff members had worked anywhere from ten to 20 years for my father, and they were up there in age, and most of them didn’t know where the on button was on a computer, let alone be able to function operationally.”

Family Loyalty and that Fork in the Road

“During that period my mum came to me and she said, ‘Look, we’re really concerned about the staff.’ My father’s manager at the time suggested to my father what most businesses would have done. There would be layoffs and they would hire new people. But my father just couldn't digest it, and he had a lot of stress around that. I took some time off work, took training, and I ended up living in the hotel for, I think it was 28 days. And while that sounds pretty intense, I think the achievement in that exercise was reaching the goal that my father had set, that we would not be laying off anybody. Then, I’d taken 30 days off, 30 became 60, 60 became 90, and I ended up joining my father’s business, which was a relatively small business at the time, certainly less than $1 million in revenue. And, you know, there was an added sort of sting to that conversation and that deal. I took a 50% pay cut to come work for my father. I’m thinking about my motivations, and I think it was more about just being there for the family, and more ego-driven than anything else. Am I regretful in any way? I think so. I think to a certain degree, you know, it’s impossible to erase from your mind that road map that you had. It’s impossible to erase it, so I don't think there’s any absolutes. To a degree I wonder what would have happened if I did continue on the course that I went on, but I certainly wouldn't change anything I did.”

Show Me the Money

“We’re conservative in our approach when it comes to finance and leverage. You know, normally we’re in the 55% to 63% loan-to-value ratio. We don’t go beyond that because we like cash flow. And because we don't have partners, we’re able to really be less aggressive when it comes to the finance side of things, and self-fund. I think on the hotel side, we’ve never been ones to really focus on acquiring properties over time for the sake of numbers. I’m constantly looking. My ear is to the ground; I’ve got great relationships with brokerage houses in the Unites States, and those relationships were built over time because of how serious we were. Now I look at probably five or six properties a week that are up for sale. But given the current environment, we’re holding onto our cash reserves because we think, especially in the US, there will be some opportunities going into 2021. I’ll give you the example of the property that we acquired in the US. It’s this historic property that was owned by a large management company in the US. It was 220 rooms, about 15,000 square feet of meeting space, two restaurants in the space, two decks of underground parking on five and a half acres. And when you're in the restaurant, you can actually see inside the football stadium, the NFL stadium where the Bengals play, and it’s the best view in the city. We managed to acquire that property at a 13.3 cap, but we did that even though there were two people in line ahead of us, because we went in and we had no finance condition; it was all cash.”

 

Fayez’s story is, as he says, “When you really boil it down, it’s about adaptability and being able to shift with a changing landscape.” And I think those are traits that would help any member of the Self Made Nation succeed.

I hope you can take the time and have a listen to the entire conversation.

And November is getting closer! I hope to see you at Double to Sell, featuring the great Cameron Herold – reserve your spot before it’s sold out!

If you’re an entrepreneur looking to exit, or you’re at the helm of a thriving business or startup, I would love to talk with you about your stories! You can drop me a line here.

Plus, if you are craving like-minded conversation with growth-oriented business owners, consider joining me and eight other business owners, investors and entrepreneurs for our next two editions of Elevated Conversations are coming up in September – watch this space for more details!

“I’m a Millionaire. So Now What?” is brought to you by Double to Sell - Canada's Premier Invitation-ONLY workshop for business owners wanting a cash-rich exit in 10 years or less. For more information, or to register, please visit the “Double to Sell” website.