My Dollar Plan asks: “What’s Your Exit Strategy?” giving the example of his father’s business:
My dad has been sick this week, and I’ve been spending a considerable amount of time with him at the hospital. Since he’s a successful small business owner for 30 years, we’ve spent some time discussing his plans for the future.
Since I’m in a very ‘anecdotal’ mood at the moment [AJC: Don’t worry, I’m sure it will wear off soon. Who could possibly be interested in my boring life? ;)], My Dollar Plan’s brief mention of his sick father reminds me of how I started in business:
I think that I’ve mentioned before about my father who started a little finance company in his 60’s after being unceremoniously ‘booted’ by his former partners, and for some unknown reason, we mutually decided that I should join him in that business as a 1/3 partner [whoohoo!].
A couple of years later, just as I realized that the business was in serious financial trouble, my father fell terminally ill. He was also unfortunate in that I wasn’t able to save the business, but I guess by bringing me in – had things not already been so screwed up (initially, well hidden from my view) – my father was creating the classic family business ‘exit plan’: bring in the children …
… bring one, bring all!
You see, my father’s Grand Plan, unbeknown to be when I joined, was to bring in both of my sisters as well … and, we had a wonderful 6 month period where he actually hired my younger sister and I would fire her the same day, then we would repeat the farce a week or two later, until he eventually gave up. Before you judge me too harshly, let me share two small snippets:
1. The business – as I found out all too late – could not afford me, let alone my sister, and
2. I would sit at my desk in the afternoon working at feverish pace trying to catch up on all the paperwork and phone calls (at the same time, naturally; who has time to ‘single task’ in their own business?!) having been ‘on the road’ all morning rushing from appointment to appointment; only to watch my sister working at snail’s pace on some basic task (I wish I could have taken a video of her very slowly and deliberately unstapling some papers sheet by sheet, by sheet, by …. [yawn] …. and, taking a minute’s rest between each sheet!), which drove me absolutely bonkers given the absolutely frenetic pace that I had to work at.
This also reminds me of the country’s richest families; the business empire was started by two brothers who opened a butcher’s shop together and parlayed that into a multi-billion steel and manufacturing conglomerate: realizing the family issues that would eventually be created upon succession (who would get/run what?), they deliberately broke up their huge conglomerate while they were still alive and in-charge and gave one division of the conglomerate to each child to own and run as their own.
Very clever exit plan: exit while still willing and able to handle the ensuing family ‘issues’ …
So, the point 0f all of this is that I am not a fan of family businesses; some run very well, but others don’t run at all.
Oh, and every business needs to have a ‘succession plan’ before you even go into it (i.e. before you either start it or buy it): work out how much you will need to sell it for, and by when, in order to achieve your Number/Date and go out and find that buyer as soon as you reach that predetermined profit/date target.