Is the glass half full or half empty? How you answer depends on your perspective. For someone who has always received a full glass and now is being told this is all the water available, this picture can be a perilous omen. On the other hand, someone lost in the desert might describe it as salvation.
Perspective is critical when making decisions within your company. A distorted perspective can lead to the wrong decision, sometimes with disastrous consequences. (more…)
I recently broke a promise I made to my wife. I promised I would not bring up politics at our family’s Thanksgiving Day table. Well the conversation turned to college football and started to get heated. I quickly changed the topic and asked what everyone thought of our presidential candidate choices. The tone of the conversation immediately calmed down.
It is amazing which conversation topics turn heated and which are seemingly too uncomfortable to bring up. But some conversations need to be had (more…)
A large portion of my career has been spent analyzing numbers. I have been blessed (or, some would say, cursed) with an ability to see stories in numbers. Once, an intern handed me an incredibly dry report which only reported the numbers from a market research study. I told her to go back and find the story in those numbers. The report she came back with (and with a little guidance) laid out a road map product management needed to create a successful marketing campaign.
Owners need to know their numbers and be able to find the story in those numbers. (more…)
I was surprised recently when someone mentioned they saw my role in the succession planning process as duplicative to that of attorneys. Using client examples, I provided a clearer understanding of how my role as a management consultant and family business advisor differed from and, in fact, eased the process for attorneys. Still, this prompted me to realize a review of the roles different professionals play in succession planning could benefit owners who have not yet begun their planning process.
To that end, below are listed a few of the key steps in the succession planning process along with the professionals most likely to assist in that step. (more…)
Once, when working with a family business client, I recommended they hire an experienced CFO. Since there was no one in the family who fit this bill, the founder said to me: “You want someone from outside the family to see the books?” (Never mind they had already shared financials with me.) Imagine what he said when I suggested they recruit independent, non-family members for a Board of Advisors.
In my last blog I pointed out the roles and benefits of an advisory board. Here I offer advice on how to choose members for that board. (more…)
Much has been written on the benefits of including independent voices on boards for closely-held and family businesses. So why do I and other advisors get so much resistance when recommending a Board of Advisors to our clients? While I may not agree, I understand resistance to adding independent, voting members to a board of directors. But a Board of Advisors is just that: A group of trusted advisors without a vote in the formal decision making process.
This resistance can often be attributed to a lack of understanding of the Board of Advisors’ role and benefits. To clarify these issues, (more…)
A recent Wall Street Journal article focuses on a potential positive in what is otherwise described as “grim statistics” for family businesses. The statistics: Only 30% of family businesses survive into the second generation; 11% survive into the third generation and 3% beyond that. Use of words like “grim” and “only” connote a terrible fate for the families of businesses that do not “survive”. However, selling the business can be the best path for many families. And, as noted in the WSJ article, now is a good time for families to consider selling. (more…)
I recently had the opportunity to sit down with a co-founder of a small, entrepreneurial company and learn about his experiences. The company was formed in 1998 and saw quick, continued growth that was only slightly curtailed by the downturn in 2008-09. Now, he and his partners are facing challenges as transitions and growth bring in a new, younger group of managers. Hearing this founder’s story, I was struck by how much his company’s path had in common with a family-owned business as well as what was different. Here is a short checklist (more…)
Do you know a business owner with a good idea for expanding their business but they “don’t have the time” to plan out let alone implement the idea? This is the reason a client engaged my services. His idea was a good one: A natural extension of his market with little competition. The owner just never took the time to create an implementation plan in the two years since conceiving the idea. Then the recession hit and the business’ lack of diversification almost put him out of business.
So what was my client (or any of us) waiting for? (more…)
Business planning is an integral part of the Succession Planning process. I was reminded of this when I read about a local lumber supply company closing its doors after 155 years of service. Curious if this was now a common phenomenon for retail lumber yards, a quick internet search revealed five closing announcements since February. All of them were family owned and, on average, been in business for 90+ years. One common theme for these closing was competition from big-box national chains.
This is where a good Succession Plan comes into play. (more…)