Today I spent a half day at a Deloitte event involving a large number of business owners who run private companies, many of them family run businesses. Deloitte are very good at organizing these kinds of events and they bring real value to the attendees … which I’m sure leads to business for the firm.
I took part in a panel discussion on the specific topic of wealth preservation and succession planning. There was also a discussion with an old President’s Club buddy of mine, Tony Sottile from Modern Niagara, a contract engineering firm focused on growth and operational excellence. There were two authors who spoke too … Tom Deans (Every Families Business) and Niall Glynn (Planning for Family Business).
I could not do a half day session like this justice because there was a ton of useful information … I will try to throw out a few of the thoughts that were covered.
1. Plan for an “exit’ as early as possible. Owners who start with an end in mind (reminds me of Stephen Covey) will run more successful businesses, even if they don’t execute an exit strategy. This means understanding your exit options and keeping as many open as possible; it means succession planning; it means constant communication amongst the ownership group whether they are family members or not; it means being focused on the “value” in your business And maximizing that! A good business owner/operator will be forced to build a better business if they do so with the knowledge of what a buyer wants!
2. While running a business requires a dedication and focus common to entrepreneurs, it is also important to cultivate interests outside the business. This includes assets outside of the business (while the business is the primary asset you have … you should work towards ensuring it is NOT be your ONLY asset). The owners who are most successful in exiting their business tend to be those with other interests … many owners “fret” about life after “the business”.
3. Aligning interests is a great way to achieve objectives. A couple of examples … (1) if in the case of a family business two generations will WIN from the same outcome, then the chances of success are increased (2) if you can allow your teams to FOCUS on doing what they do best, for example taking the administrative burden away from your professionals … then everyone is likely to benefit (this example was about buying companies and bringing them into a bigger entity … the bought companies can be freed to focus on their core business, with the “business” of running a business handled by “head office”).
4. Family businesses are first and foremost businesses … don’t let the “family” thing get in the way. The chances of success are greatly increased if everyone operates on that basis, with no “special considerations’ for the family members doing the job.
5. Communication … often, clearly and in different ways … like in almost every aspect of our lives, is especially critical amongst business owners (and even more so when complicated by the fact they might be family members).
6. There are no “cookie cutters”, or one size fits all answers … which makes all of this HARD. Don’t expect running a business or exiting a business to be in any way easy … it won’t be!
7. When running a business we have advisors, our accountant, lawyer etc. It is equally important to have your set of trusted advisors on the personal side, EARLY.
8. Any company can go bust … that is a fact of life. in the last few years alone we have seen the biggest bankruptcies in history … Lehman Brothers, Washington Mutual, GM, Texaco. That wasn’t supposed to happen! So … imagine how easy it is for your small business to go under! Plan for the future!!!
9. If you go to these kinds of events you can learn SO much more than the sad excuse for Coles Notes you are reading here on my blog!
10. This was an interesting event for me, and I have been at this for more than 15 years now. Never stop learning!
Thanks to Deloitte for a great session!