Posts Tagged ‘preparation’

Keeping the Business in the Family – A Cautionary Tale

Tuesday, August 13th, 2013

The stories written by the children who bought family businesses should be mandatory reading for all business owners.http://www.profitpath.com/wp-content/uploads/2013/08/iStock_000016746886XSmall.jpg

Let’s face it, the successors have a unique perspective. They’ve seen what does happen, not what might happen.

For example, a young Australian woman – let’s call her Alex – was told by her father that he had only 12 to 18 months to live. Would she buy the family business?

She, of course, said yes. Most of us would have done.

The company printed “What’s On in Sydney” and distributed it through every hotel in the city. Over the years there had been offers for the business, but they hadn’t met her father’s valuation so he hadn’t taken them.

Alex was a successful freelance writer. She’d never run a business and, until her father announced his illness, had never shown interest in the family one.

She co-opted a brother to redesigning the magazine, they built a web site and her father introduced her to all of her advertisers. And she got to spend 2 or 3 days a week with her father as he taught her the business.

But, after a few months, Alex realized that, while she loved writing, she hated selling advertising so much that she couldn’t keep on doing it.

And she had to tell her father.

So, one day a few weeks before he died, Alex called him. She felt devastated, that she had really let him down.

Soon afterwards he was admitted to palliative care.

With her father’s business partner, Alex found a business broker and put the business up for sale just before her father died.

What’s to be learned?

1.  Her father had passed up opportunities to sell the business because he was stubborn about the valuation that he wanted. He should have compromised. In these circumstances the company probably sold for less than it would have done had the sale been well planned.

2.  Alex responded with emotion rather than logic when asked to buy the business.

3.  Would things have been different if her dad had brought Alex and her brother into the business earlier? They could have complemented each other – Alex writing, her brother doing the design work and her father selling ads.

4.  With more time to prepare, they could possibly have hired someone to replace her dad.

Alex describes the experience as being “rough at the time”. That’s probably an understatement.

Losing a parent is hard. Watching one wilt under cancer has to be worse.

Moving into and learning a business is difficult in the best of times. Deciding to sell is probably one of the hardest things that anyone does in their life.

Dealing with two major life events at once cannot be easy.

And it’s all so avoidable. It’s called succession planning.

If you want to read the story in Alex’s words go here.

 

 

If you enjoyed this post you’ll also enjoy 4 Reasons Why Every Business Should Be Sold…..Eventually

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Being Told What To Do Isn’t Good For Business

Tuesday, March 19th, 2013

I do not believe that it’s a consultant’s place to tell a client what to do.Business owners must ultimately make their own decisions

I do believe that it’s our responsibility to give the business owners we work with the best possible advice we can.

And when I say give, I don’t mean that we just hand the advice to them by saying “Here’s what I think you should do….” or “Here’s what I would do…”

I believe one of the most effective ways to ‘provide’ advice is by using questions to help owners realize that there are, for example, possibilities they may not have considered; opportunities they may not have seen; and alternatives that may not be obvious.

Then we have to allow the owners to decide for themselves what to do with the ‘advice’.

Those of you who follow my posts know that I hold another belief to be very important. That is that rules are for the guidance of wise people and the blind obedience of fools.

So when, with respect to giving ‘advice’, do I break my own rule?

There are 3 situations which spring to mind.

First, if I see an owner, or his or her management team, about to do something that is likely to end in disaster.

I’ve accumulated almost as many grey hairs as I have experiences. I think it’s called ‘grey haired equity’. Some of mine has come from making brilliant moves but most of it has come from my own, or other people’s, mistakes and hard knocks.

It would be irresponsible to allow someone to repeat a move that is certain not to work.

Second, if a business owner asks directly for my opinion, or what I would do if I were in their shoes.

Even then I always ask “Are you sure you want my input?” before volunteering it. That’s because the owners we work with often already know what has to be done but don’t want to do it. So they’re hoping I’ll tell them to do something else, something that will, for example, not hurt people.

The third and final situation occurs when I lose my concentration and forget my own rule.

That happens most often when we’re facilitating – for example either a strategy development or business planning meeting. Particularly toward the end of the day when we’ve been juggling process, timing, making sure everyone is engaged and that no input is overlooked.

To avoid the third situation we have to be well prepared for every encounter with a client.

We have to think carefully about the objective, format and content of each interaction or activity we do with, or on behalf of, the companies we work with. That takes time.

I believe it’s time well spent because the alternative is that the owners we work with become used to us telling them what to do. That’s a form of dependency.

And we don’t do dependency. But that’s a topic for another post…

 

If you enjoyed this post you’ll also enjoy Why You Need A Consultant With Hands-On Experience

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