How NOT to Take Over the Family Business

By Rich Bond

When I took over my family’s 16-year-old temporary help business, I assumed I would be allowed to run it as I saw fit.

This was a bad assumption. It turned out that my father and younger brother wanted me to continue to do exactly what they had done, but were hoping for better results, which according to Einstein, is the definition of insanity.

We all learned valuable lessons. I learned that my father was much smarter than I thought, but he limited how much the business could grow because he wasn’t willing to invest in sales.

After almost a year of nearly constant squabbling, we came to an accommodation.  I produced a one-page summary report of what happened the previous month that was mostly comprised of operational statistics – i.e. number of temps who started new job and the number of temps whose jobs ended.

The report showed that although my father and brother were sure my propensity to spend money would destroy the business, my plan was working. Sales were growing rapidly, and profits were returning to their previous levels.

After two years, we agreed to part company, which was a win for everyone.  My brother sold the business back to the franchisor for more than the franchisor had ever previously paid for a repurchase (our sales and profits had both doubled).  He was able to invest the proceeds in a start-up business in the tech space he loved.

I went into business for myself as a finance recruiter, and my father finally got to retire.

If your business is making you and your family crazy, I’d love to talk to you to see if a good controller or finance person could make your business better. The person I’d place would function as a true strategic business partner (not a backward-looking bookkeeper) and help your family to get along.

 

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