BUSINESS
You built your business from scratch ; started it with a $ 2,000 loan from a friend who you paid back the first year ; sweated the details of every new equipment purchase , new hire and expansion . In short , that business is your life . The problem is , you won ’ t live forever . Nobody does . And if you don ’ t start making plans about who will someday own and manage your business , it may end up in the hands of people who will destroy your legacy . You don ’ t want that . So , if you ’ re over 40 , start putting some serious thought into your options for business succession today – even if all you do is pull out a clean sheet of paper and set down a few options .
First stop , the kids For many business owners , the logical successors are their children . So look over the brood and ask yourself seriously – very seriously – whether you deem any of them competent to take over .
You need to be objective here , since many children raised in the comfort of a home provided by an aggressive entrepreneur tend to take wealth for granted . If you sense entitlement , or if you feel a son or daughter feels they should be inheriting the company simply because of blood ties , look elsewhere for your successor .
But if you do have a kid who has shown genuine interest in the business , then you need to have “ the talk .”
Ideally , the child in question has actually worked in the business – and here we ’ re talking about something more than spending summers in the stockroom . He or she should be working currently in , or preparing for , a role in the managerial side of the company ( finance or marketing are good starting places ) and be genuinely earning the salary you ’ re paying .
I once worked for a machine tool company where the owner gave high paying , senior jobs to his incompetent children . He was one of those owners who refused to let go and came to work every day to micromanage operations until his death at age 92 . Worse , the salaries his kids were getting ( which were quadruple the market rate for comparable work ) leaked out to the rank and file . It left those employees demoralized and the quality of their work , and ultimately the company ’ s products and profits , suffered .
Worse , he never formally decided which of his three children would ultimately be in charge if he ever did let go of the reins . This led to infighting among the siblings that further poisoned the atmosphere in the head office and caused many of the company ’ s competent , non-family , managers to quit . And down went the spiral . Five years after the owner died , his unqualified children gave up on their pathetic efforts to run the company and sold it for pennies on the dollar . The private equity firm that bought the company fired everyone , dismantled the plant , and moved the tooling and the jobs overseas . The once proud company is now mocked worldwide for the inferiority of its goods .
You might be tempted to feel sorry for this guy , since he ’ s probably turning over in his grave . Don ’ t be . He made every mistake possible in handing off his business , and reaped what he sowed .
The lesson ? Determine whether you have a viable successor among your children . And , if you do , make your intentions about succession clear to both that child and the rest of the family .
HOT RUSSIAN BRIDES ® - MEN ’ S LIFESTYLE MAGAZINE 15