Annual Report 2015-2016

Table of Contents

Message from the Chair 1

Governance 4

Business Development 7

Looking Ahead 10

Measuring Up 13

Audited Financial Statements 15

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Message From the Chair

And 30 years later we continue to implement their vision. As stewards of Sagehill my

board colleagues and I are pleased to serve and to contribute to the on-going growth of our

region and our not for profit.

Celebrating 30 years of service encourages us to pause; to take a look at where

we’ve been. In those 30 years we have impacted more than 50% of the small businesses in each

community in our region. And when we looked further, our staff provided more than 26,000

advisory and information services. That’s an average of 5 services per day! And while the

small business owners in our region have been growing their business we’ve also been

supporting them by providing the financing they require. In fact, through the years we have

taken our initial capitalization of $1,156,000.00 and successfully grown it to $3,475,169.00.

To date, we’ve written 700 loans totaling $17,482,759.00, leveraged an additional

$22,326,107.00 from traditional sources of financings as well as owner’s equity and helped

683 business owners create more than 1,500 jobs in the Sagehill region. Now, that’s

something to celebrate!

30 years of service is certainly a milestone we are

extremely proud of. 30 years ago a group of leaders from

14 local municipalities made the decision to establish the

Sagehill Community Futures Development Corporation.

They believed that taking responsibility for our collective

economic prosperity was the right decision to make.

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We’re also pleased that new programming we created and introduced like our Human

Resource program for small business owners has been met with enthusiasm by small business

owners, municipalities and leaders in our volunteer community, alike.

This year we will be introducing a new program – Elevate. Elevate is Community

Future’s dynamic new program for youth and adults with a disability or health condition

interested in starting a business in rural, remote or northern communities in Alberta,

Saskatchewan or Manitoba. And of course, you’ll find it right here in the Sagehill region.

Funded in part by the Government of Canada’s Opportunities Fund for Persons

with Disabilities Program, Elevate provides assistance, support and resources to qualified

individuals who wish to become self-employed. We’re extremely pleased to add Elevate to

our program delivery mix!

Historically, we’ve enjoyed a great working relationship with various federal ministries

and agencies. We don’t see that changing any time soon. This year we signed a new 3 year

contribution agreement with Western Economic Diversification Canada. The agreement is

important for two reasons. One, it affirms the federal commitment to community economic

development programming delivered by local not for profits like Sagehill and, two, it provides

for an annual funding contribution. That contribution represents, on average, about 65% of

our annual operations budget.

We also do business with the provincial government. We have successfully delivered

the Self Employment Program in each of the years we have been in operation. The program

is now administered provincially and has provided a kick start for many entrepreneurs in the

Sagehill region. One of the keys to our success with the HR program has been the great

working relationship we enjoy with Ministry of Labour Relations and Workplace Safety –

Employment Standards Division. That relationship ensures that we have the most up-to-

date employment standards information and allows us to provide accurate and timely 2

information to our customers. Recently we were asked by the Ministry to participate in a

series of three test webinars. Our job was to provide feedback on the content as well as the

format/layout of the webinar. The feedback was used to plan for the launch of a series of

webinars the Ministry has planned for Saskatchewan employers. It certainly was our

pleasure to be of service to the Ministry.

Through our 30 year history we’ve supported small business owners and members of

our volunteer community in the best ways possible. We’ve cultivated relationships important

to our clients and to Sagehill. We’ve respected each of our contractual obligations. And

we’ve been responsive to demands in our market place. Collectively, those efforts have

contributed to our success.

On behalf of the Sagehill Board I want to express our sincere thanks to the folks

who call our region home. It is your continuing support and commitment to collective success

that drives us. Thank you.

Courtney Skrupski

Chairperson

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Governance: Good governance. Each director has a duty of care, of diligence, of loyalty and a duty to members. They have a unique challenge to lead, to counsel and to serve. Sagehill is ably governed by a dedicated group of volunteers. The men and women who volunteer their time, their experience and their energy to Sagehill occupy a very special position within our Corporation. They are the stewards of our public trust.

Each individual is elected by the membership to a two year term during our Annual General Meeting.

That initial term may be repeated twice. After serving 3 consecutive 2-year terms a member must take a minimum 1 year leave from the board. Should a vacancy occur during a member’s term the board may choose to fill the vacated position by appointing an individual to the board. The term of an appointed individual expires at the next- scheduled AGM. At that time, the appointed individual may stand for election, if they choose. Our Directors are the stewards of: Our Mission

We empower people, encourage entrepreneurial initiative and assist our communities to achieve what matters to them.

Our Vision

Our leadership, in business and community economic development, creates prosperity in our region.

Our Strategic Goals stimulate, augment and support the entrepreneurial spirit and skill in our region. respond to the changing opportunities and challenges facing our rural communities. network with other organizations providing high quality community economic

development service. effectively manage and grow our own financial and human resources.

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A listing of our current Directors, including their tenure on the board, can be found in the following table:

Meet the Members of our Board:

Director Term Begins Ends Skrupski, Courtney 1 June/12 June/14 2 June/14 June/16 Chegus, Melissa 1 June/13 June/15 2 June/15 June/17 Lueke, Floyd 1 June/14 June/16 Titman, Loa 1 June/13 June/15 2 June/15 June/17 Patel, Lomesh 1 June/14 June/16 Boychuk-Kidd, Patty 1 June/14 June/16 Kneeshaw, Paul 1 June/14 June/16

Courtney Skrupski

Courtney was appointed to the board in October 2011 and elected to his first term in June 2012. He is currently completing his second term and has served as Chair since July 2014. Courtney and his wife, Janet, own and operate C.S. Skrupski CGA Pro Corp. with offices in Rosthern and Shellbrook.

Melissa Chegus

Melissa was elected to the board in June 2013. In July 2014 Melissa was elected to, and accepted, the position of Vice – Chair. Melissa together with her husband, Chris, own and operate Chegus RV Sales in Watson.

Floyd Lueke

Floyd was appointed to the board in November 2013 and was elected to his first term with the board in June 2014 Floyd and his wife, Elaine, own and operate Midland Glass in Humboldt.

Lomesh Patel

Lomesh was elected to the Board in June 2014 and is currently completing his first term with Sagehill. Lomesh owns and operates Your Dollar Store With More in Humboldt.

Loa Titman

Loa was elected to the board in June 2013 and is currently serving her second term with the Board. Loa and her husband, Dave, own and operate Concrete Elements on their farm in the Viscount area.

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Patty Boychuk – Kidd

Patty was elected to the Board in June 2014 and is currently completing her first term with the board. Patty and her husband, Ed, own and operate 2 & 41 Dairy Queen.

Paul Kneeshaw

Paul was elected to the Sagehill board in June 2014. He is currently completing his first term with the Board. Paul and his wife, Diana, own and operate Misty Garden Greenhouse & Gift Shop in Humboldt.

Business Development:

Owning your own business can be daunting; it can be lonely; it can also be incredibly

rewarding. With Sagehill, small business owners have a reliable and totally objective partner they can call on any time.

And after 30 years of service our call volume continues to rise. We’re extremely proud of that. Many times the question is about getting started – what to do first, what to do next, how to fix what might have gone a bit wrong. We’re happy to answer each of those questions. Just as easily the questions could be about trust taxes, marketing or inventory strategies, bookkeeping, POS systems, how to exit, or how they might manage their most important resource, their people. In each case we provide advice and support.

Over time we’ve also developed specialized tools to help small business owners manage the ins and outs of their business. This past year we developed an Excel spreadsheet that will allow individuals to enter their financial transactions (sales, expenses, etc.) month-by-month and, will, automatically provide a running 12 month total. Many business owners have taken advantage of this free tool. Financing:

Since 1989 we’ve filled a gap in the commercial lending market. We continue to use a developmental lending policy versus asset based financing. That means our due diligence focuses on the individual in front of us, their skills, their plan for business success and then on down payment and collateral. We know these policies work. We see it on the main streets in our communities every day. Businesses that might not be there if an asset based financing approach was used are thriving, creating jobs, and providing goods and services that customers want. That’s good business.

The maximum loan we can write remains at $150,000.00. For many small business owners that amount works but in recent years each community in our region has been

The small businesses, in each of our communities, are critical contributors to local economies.

Not only do they supply necessary goods and services but they create jobs, they create wealth and the owners make important contributions to community events and projects.

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experiencing a transition of business ownership. Many business owners are making a decision to retire or to pursue a new opportunity. That means their existing business is up for sale. And sometimes the price point is substantially more than our limit; however, that presents an opportunity to partner. Many times the financing we have written is in partnership with a bank or credit union and sometimes our partners will include organizations like Farm Credit Canada (FCC), Business Development Bank (BDC), or Women Entrepreneurs.

We’ve also written loans together with other Saskatchewan Community Futures office when a commercial opportunity crosses our regional boundaries. This year we have formalized our partnership with several other Community Futures Offices by creating the Saskatchewan Syndicated Loan Pool. This partnership allows us to consider commercial loans up to $600,000.00 – this Pool will be an important new tool for us going forward.

As we all know, many times when one door opens another closes. Earlier this year the provincial government announced that funding for the Small Business Loans Association (SBLA) program would be cut. The SBLA program got its start in April 1989 and played an important role in many communities across the province including those in the Sagehill region. We were certainly sorry to see the program close.

Demand in our own lending pools remained strong this past year. We wrote just under a $1,000,000 in loans during the 2015-2016 fiscal. HR Management

Growth in our HR Program remains strong. This year we worked with small business owners as well as Ambulance Associations and Municipal governments to develop practical and easy to implement HR policies and strategies.

This year we also introduced a new way of meeting with our HR clients. We have been using software called Adobe Connect to conduct many of the meetings. Adobe connect allows our customer to meet with us face to face via an internet connection. This software has proven very effective in terms of time management, for our customer and for us and has certainly helped to manage travel costs and consequently, the price of delivering the HR program. Response from each of our HR customers has been great.

In November we held a Labour Standards workshop focused on the HR management requirements of rural municipalities. The workshop was very well attended not only by municipal offices in our region but from outside our region as well. Evaluations were very positive. One of the keys to our success with the HR program has been the great working relationship we enjoy with Ministry of Labour Relations and Workplace Safety – Employment Standards Division. That relationship ensures that we have the most up-to-date employment standards information and allows us to provide accurate and timely

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information to our customers. Recently we were asked by the Ministry to participate in a series of three test webinars. Our job was to provide feedback on the content as well as the format/layout of the webinar. The feedback was used to plan for the launch of a series of webinars the Ministry has planned for employers. It certainly was our pleasure to be of service to the Ministry. Projects Last year we told you we were invited to participate in a National project focused on Learning & Essential Skills. We jumped at the chance to participate with colleagues across Canada.

This innovative research project will provide key strategic information for the manufacturing sector to support performance improvement efforts. The research will examine the relationship between the literacy and essential skills levels of workers and the performance of a manufacturing company. The project began with the creation of a business profile using data provided by each participating firm. The next step was to conduct Essential Skill Testing with each employee of our participating firms. That information coupled with the business profile information will be used throughout the project and at the end each manufacturing company will receive a final business profile with benchmarking information that will allow comparison between their company and the national results from all participating businesses as well as the opportunity to compare with national and international manufacturing sector data.

As we move through the project other tools will be made available to the participating companies including performance reporting matrices and essential skills training decision making tools. Each of the companies participating across Canada, including those from the Sagehill region, will have an opportunity to meet each other at a 2017 national event.

This national project is funded by Government of Canada’s Adult Learning, Literacy and Essential Skills program and is being administered by Restigouche CBDC Inc. located in Campbellton, New Brunswick.

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Looking Ahead! We’re excited about the coming year. You never know what’s around the corner – a new community-based project, a new business or a new opportunity to improve our programs and services. After 30 years you’d think that maybe we’d seen it all – we know that’s not true. There is still plenty to do, new opportunities to seize and new people to meet. Here’s a sample of what we expect: Elevate

Elevate is Community Future’s dynamic new business building program for youth and adults with a disability or health condition interested in starting a business. This program assists entrepreneurs locating their businesses in rural, remote or northern communities in Alberta, Saskatchewan or Manitoba. And of course, you can find it right here in the Sagehill region. Funded in part by the Government of Canada’s Opportunities Fund for Persons with Disabilities Program, Elevate provides assistance, support and resources to qualified individuals who wish to become self-employed. We’re extremely pleased to add Elevate to our program delivery mix!

How does Elevate work?

Application - Once you’ve determined that you’re a good fit for the program, contact the Sagehill office to begin the application process.

Assessment - Next, we’ll guide you through the assessment process that will help determine your training and financial needs, along with any accommodation requirements you may have.

Planning – Then we’ll begin work on your business plan and social innovation strategy. After we’ve worked out those aspects, we’ll move on to additional business readiness training, explore financing options, and match you with an experienced business mentor.

Execution – At this point you’ll be ready to execute your business plan and begin planning your launch. All the way along, we’ll be there to make suggestions and keep you moving in the right direction.

Celebration – Last, but not certainly not least…we’ll celebrate your success and if you choose we can capture your achievements on a video that you can use to promote and market your business.

Are you ready to take your business idea to the next level? Call us!

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Plan to Hire: Building an Inclusive Workforce Project. This pan Canadian projects aims to increase employment for persons with disabilities by creating an employer awareness campaign. We have agreed to participate in this project with our colleagues at CBDC Restigouche, New Brunswick who will be the project lead. We expect that most, if not all of the 269 Community Futures Offices across Canada will participate in the project. Our collective objective is to produce tools on various themes linked to employer awareness about the barriers faced by persons with disabilities, as well as highlighting their skills. One of the components of this project is an employer survey. We expect that we will be distributing that survey to employers throughout our region during the month of May 2016. Entrepreneurship Development System

The Mid-Sask Municipal Alliance (MSMA) is currently working on an Entrepreneurship Development System Project (EDS) for their region. We expect to participate in this project.

The concept of an EDS is to help focus development efforts on building an environment in which many people from all types of backgrounds can start-up businesses that contribute to the regional economy, no matter what their size.

The goal of the project is to establish a regional economic development program focused on business retention, expansion and investment.

The MSMA is an association of thirteen municipalities, each of which is located in the Sagehill Community Futures region. Those municipalities include R. M.’s of LeRoy #339, Morris #312, Prairie Rose #309, and Usborne #310; the Towns of Lanigan, LeRoy, Nokomis, Watrous, and Watson; the Resort Village of Manitou Beach; the Villages of Drake and Jansen; as well as City of Humboldt.

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Measuring Up! During the past several years we have been using a performance measurement

strategy that evaluates Community Futures loan client success by comparing several indicators of business success with those results from comparable but unassisted (by CF) firms. The indicators include industry concentration, employment growth, firm longevity, sales growth and labour productivity growth. The data for each of the five year periods (2003-2008; 2004-2009; 2005-2010; 2006-2011; 2007-2012) was researched and compiled by Stats Canada. •The results are in for 2007-2012 and our customers are looking pretty darn good (but, we knew that)! What follows is a ‘reader’s digest’ version of the results. Employment Growth:

In general, CF assisted firms outpaced comparable firms in terms of employment growth across most industries.

All sizes of CF assisted firms were more successful in creating jobs than the comparable group of firms (7.92% versus 0.93%)

Small-sized firms (<20 employees) demonstrated considerable job growth of 9.68%, compared to only 1.70% in comparable firms.

CF assisted firms in Administrative and Support, Waste Management and Remediation Services saw the greatest compounded annual growth measured at 15.17%, as opposed to comparable firms that exhibited job growth of 2.22%.

Manufacturing saw the least growth exhibited by CF Assisted Firms (3.07%) and Management of Companies and enterprises was one of three industries showing negative growth in the same of Comparable Firms (-3.32%).

Compounded Annual Employment Growth inWestern Canada for 

Firms with less than 100 ALUs (2007‐2012)

9.177.92

6.72

5 4.103.52

0.930.11 0.19 1.08

0Total  Construction Retail Other        

and Food Services 

CF Assisted ComparableFi

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Firm Longevity: CF loan clients have been more successful in remaining in business than those firms in the comparable group. Firm longevity for CF assisted firms remains higher in later years. The business survival rate for CF assisted firms was 71% for the fifth year following entry, compared to 46% for comparable firms. Again, the difference between CF Assisted firms and the comparable group is more pronounced than in previous reporting periods. Sales Growth: Overall, all sizes of CF assisted firms outperformed the comparable group in terms of sales figures between 2007 and 2012.

Sales by medium sized CF-assisted firms increased by a compounded annual rate of 9.18% per year while sales by firms in the comparable group rose by 2.81%.

Small-sized CF assisted firms increased their sales by a compounded annual rate of 10.86% per year almost 8 percentage points higher than firms in the comparable group.

Labour Productivity: Labour Productivity, which is estimated using sales per worker, is an additional measure to evaluate competitiveness of small and medium-sized businesses in the west. CF assisted firms exhibited further improvements in labour productivity between 2007 and 2012.

Sales per worker increased at a compounded rate of 2% per year in CF assisted firms and 1.8% in comparable firms during this five year period.

Both CF Assisted and comparable firms saw their highest sales per worker figures in 2012.

Industry Concentration: According to the Herfindahl index, a measure of industry diversification, CF organizations are lending to a slightly less diversified client base than the comparable group; however, during this time the CF firms have made further strides in diversifying its client base

The data demonstrates Community Futures organizations’

lending activity is making a difference!

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Created in 1985, Community Futures is the largest, most well-

established national community economic development network in

the country. Nationally, Sagehill has 267 sister Community

Futures Development Corporations. They can be found in every

province and territory. Community Futures is a Government of

Canada initiative designed to help communities develop and

implement strategies for dealing with a changing economic

environment.

Sagehill is also a proud member of the Business Service

Network. With a network of over 100 points of service across the

West, small and medium-sized businesses in most rural and urban

centers can easily access a range of business services through

Western Economic Diversification's (WD) Business Service Network.

The Western Canada Business Service Network consists of

several integrated organizations that provide entrepreneurs with

the expertise they need to start a new business or expand their

existing company. The network includes Canada Business Service

Centers, Community Futures Development Corporations, Women's

Enterprise Initiative offices, Francophone Economic Development

Organizations, and regional WD offices in Western Canada.