Business Brief: Buying ‘boring’ boomer businesses

Good morning. Instead of launching startups or building new brands, young Canadians are buying “boring” businesses from retiring boomers – think car washes and vending machine companies. And I need to warn you: By the end of this newsletter, you might start browsing listings for laundromats. But first:

In the news

Ottawa: Prime Minister Mark Carney’s government promises a “substantive” fall update, as critics call for a full budget.

Economy: The TSX might have closed at a record high, but Canada’s economy is still in flux, as Donald Trump starts cutting tariff deals.

Health: Ontario plans to launch a new consultation on restricting exclusive deals between pharmacies and insurers.

Retail: Canadian Tire will acquire the historic Hudson’s Bay stripe design and other intellectual property in a $30-million deal.

In the know

First Nations group buying minority stake in Enbridge’s Westcoast pipeline network

Stonlasec8 Indigenous Alliance Limited Partnership will acquire a 12.5-per-cent interest in Enbridge’s Westcoast gas system.

• What: A consortium of 36 First Nations is buying a minority stake in Enbridge’s B.C. natural gas pipeline network for $715-million.
• Why: The move is a bid to secure economic benefits from infrastructure that runs through their traditional territories.
• How: Stonlasec8 has secured a $400-million loan guarantee under a federal program to ease the way for Indigenous peoples to gain equity stakes in major industrial projects.
• Next: The deal’s participants said they expect many more such transactions across the country.

In focus

Retiring business owners are sweeping the country. That’s an opportunity.

Hi, it’s Meera Raman, The Globe’s retirement and financial planning reporter.

I didn’t set out to write a story that would make me (and maybe you) rethink what a “dream job” looks like. But after a few weeks of talking to people in their 20s, 30s and 40s about why they’re buying laundromats, car washes and other so-called “boring businesses” from retiring Canadians, that’s exactly what happened.

These aren’t get-rich-quick schemes. In fact, the appeal is the opposite. Instead of starting something new (and risky), budding entrepreneurs are looking to buy businesses that already have steady customers, proven revenue, and low overheads that make them more resilient to recessions.

And right now, there are plenty of businesses up for grabs as older owners look to retire.

The numbers here are big. About 75 per cent of business owners plan to exit their companies in the next decade – that’s over $2-trillion in assets that could change hands.

For some of these buyers, owning a boring business is a pathway to escape the monotony of a 9-to-5 job. For others, it’s not meant to replace the income they make at their day job, but is instead an investment, similar to a rental property.

Let’s look at an example: Maureen Ngo. She was in her fourth year at the University of British Columbia when she decided to drop out. Not to build a tech startup or launch a lifestyle brand – she left school to buy a laundromat.

Ngo told me she didn’t want to feel stuck in a 9-to-5 job. And when she stumbled on Codie Sanchez – a popular YouTuber who champions the “boring business” path to financial freedom –she was hooked.

She spent eight months researching the laundromat industry, then hand-delivered letters to more than 20 laundromat owners across Vancouver expressing her interest in buying their business.

One of them bit. A year and a half later, she’s made her investment back, built a small team, and is thinking about buying another business.

What struck me while most reporting this story was how personal these deals are. They’re not your classic mergers-and-acquisitions setups, with lawyers, brokers and big egos in boardrooms. They’re happening over casual conversations or – in one case – while someone was washing their truck.

Jeff Martinuk was doing just that when Michael Zorn, the then-owner of Grenfell Car Wash in rural Saskatchewan, walked up and asked if he’d be interested in taking over the business. Zorn, 54, was ready to sell after two decades, as the work was becoming physically demanding, and Jeff – a young guy in his 30s and a familiar face in town – seemed like the right fit.

Jeff and his wife, Michelle, were hesitant at first. But after digging into the business’s financials, it looked like a good investment for them, and they ended up buying it. They’re still learning the ropes, but they’re breaking even and plan to use the profits to pay off their debt.

Of course, this isn’t an easy path. Financing is tough. Some of the buyers I spoke with used a mix of loans and personal savings. And many are competing with “search funds,” backed by investors and private equity firms.

But smaller buyers have something money can’t always buy: relationships. For a lot of retiring owners, choosing a buyer is about more than price – it’s about passing the torch to someone who cares.

“I was clear with him right from the beginning, ‘I’m not going anywhere. I’m here to help you,’” Zorn said of Jeff. “I want to see him do well, because I took a fair bit of pride in how I ran the business. I think highly of them, and I want them to be blessed by the business too.”

It’s not sexy. But boring just might be the hottest new business deal.

To read more, check out my full story.

If you read it, you’ll even get to figure out what a powder coating business is (spoiler: it’s boring).

Charted

Ontario projects $14.6-billion deficit in budget

The Ontario government is forecasting a deficit almost 10 times larger than it predicted last fall for the coming fiscal year, as the province wrestles with the impact of U.S. tariffs. Here are six key takeaways from the budget.

Bookmarked

On our reading list

Round two: Canada Post workers could go on strike this month. Here’s what to know.

Up in the air: The jet Qatar wants to give to Donald Trump? Probably not going to happen.

Dropping bars: U.S. academics warn the Drake lawsuit could have “dangerous” ripple effects on rap music.

Morning update

Global markets edged higher to end a positive week that saw investors cheer a tariff truce between the United States and China, but there was enough uncertainty to keep them cautious. Wall Street futures were in positive territory, while TSX futures followed sentiment higher.

Overseas, the pan-European STOXX 600 was up 0.47 per cent in morning trading. Britain’s FTSE 100 rose 0.42 per cent, Germany’s DAX gained 0.68 per cent and France’s CAC 40 advanced 0.64 per cent.

In Asia, Japan’s Nikkei closed flat, while Hong Kong’s Hang Seng fell 0.46 per cent.

The Canadian dollar traded at 71.61 U.S. cents.