2nd Generation Businesses

[diamond brian]

This is bound to be a touchy subject.

Those of you who are running businesses your predecessors started:

Have you really added any value to what your fathers did?

In other words, are you a product of your family's efforts, or have you actually done anything to add value to the worth of your family business?

So, did you take daddy's rug shop to a six-member operation, or did it happen naturally because of a growing population over the past few years?

 

[Ken Snow]

What about 3rd gen and why are you asking?

 

[Desk Jockey]

My father was doing $200,000.00 (4-employees) when my brother and I were just young technicians, primarily carpet cleaning with a little bit of restoration mixed in.

We changed the focus to restoration and the timing was right as we experienced rapid growth in the 80's. Last year 1.8 million (27-30 employees)

Despite what took place we could not have done it with out my father laying the ground work. He established the brand, the culture with in our company and the desire to succeed (had to feed 6-kids).

Now before anyone gets impressed, a more aggressive management team could have built this company into much more. I am very conservative, as is my father, my brother more aggressive.

We hold my brother Dan back! LOL

Life is about more than money any way! isn't it? :wink:

 

[diamond brian]

It's great to hear these success stories. Soup for the soul.

The reason for this thread is that I was thinking about a competitor I have is dumb as dirt. I'm pretty sure he didn't have to pay his dues--if you know what I mean.

The only thing he has going for him is that someone much better than him toughed it out during his company's formative years.

 

[Rambo]

CleanRay, LLC

We have a 3 generation business with all 3 generations working in it at present. I have a fourth generation on board (he's 4) and I hope I'm still here making sales calls when he starts to push a wand. We push this fact in our advertising and sales calls, it is part of what makes us unique.

 

[Ken Snow]

Same here Rambo though we only have 2nd and 3rd gen in ours now with the 3rd gen the owners.

 

[Steve Toburen]

"So basically, you're talking about morons, being given great businesses(from their family), and they take them down the poop hole, in 21st Century terms ?"

Happens all the time. There is even an old saying about it:

"Rags to riches to rags in two generations". So sad because the hard work of a lifetime (plus often the financial welfare of many loyal employees) is peed away.

Island Boy

PS How to avoid this sad scenario for all you first gen business owners looking to transition your company on to your kids? Some musings ...

1. Above all else, do they want it? Many don't.

2. Make them earn it, both emotionally and financially. Hard to do but no perks or favors.

3. Build the same Infrastructure you would to transfer your business to a new and inexperienced buyer. Systems, procedures, you know the drill.

4. Try (this one is hard) to realistically decide if your kid(s) have both the management smarts and the fire in the belly to run the company.

5. IF you are going to transfer your company to multiple siblings it is VERY important to have defined areas of responsibilities in writing and enforce these boundaries.

6. Once you have done all of the above- get out of the way and let your kids do the job you have trained them to do. (This is the hardest one.)

 

[Lee Stockwell]

#6 (I could swear Justin has been talking to IB)