Archive for the 'family business' Category

RESULTS: With Mother’s Day coming up, how much did your mother influence your life?

The Question:

With Mother’s Day coming up, how much did your mother influence your life?

24% - My mother was the most influential parent in my life.
54% - My mother was very influential in my life.

16% - My mother was only somewhat influential in my life.
5% - My mother was not a factor in my life.

Jim’s Comments:

It was good to see that almost eight-of-ten of our sample were significantly influenced by their mothers.

I used that word - influence - on purpose in this week’s question about our mothers. I’ve never doubted my mother’s abundant love, which obviously influenced my life. But some of the ways she influenced me was how she showed up, her work ethic, and specific times when love wasn’t exactly in my definition of how she was “influencing” me, if you know what I mean, and I think you do.

Happy Mothers Day to those who gave us life, and loved us even when we weren’t loveable. And happy Mothers Day to those who aren’t our biological mothers, but chose to love and care about us anyway. In addition to my mother, Virginia, who just turned 91, this week I’m also thinking about three aunts who were nothing less than my guardian angels - Kathleen, Reba and Addie - who now are real angels.

RESULTS: How concerned are you about potential business damage due to racial tensions?

The Question:
How concerned are you about potential damage to your business due to racial tensions?

35% - Not concerned at all
49% - Not concerned in my market, but upset about owners who’ve been harmed
14% - Somewhat concerned and upset about owners who’ve been harmed
3% - Very concerned - if it can happen in Ferguson, it can happen here
Jim’s Comments:
As you can see, while most of us aren’t worried about being looted by racially-charged protesters, we do have empathy for those who’ve been harmed.

But we’ve got to stop acting like America has made no progress with race relations in the past half-century every time a single altercation happens. In America, where the rule of law is supposed to replace anarchy, how does what happened between Mr. Brown and Officer Wilson justify the destruction of neighborhood small businesses?

And shame on national leaders whose words and behavior give grievance-merchants license to incite riots that make collateral damage of innocent people, including Main Street business owners.

RESULTS: How do you feel today about your decision to be a small business owner?

The Question:
How do you feel today about your decision to be a small business owner?

66% - I’ve never regretted my decision to be a small business owner.
13% - Things started off rocky, but I’m now happy with my decision.
21% - It seems my best days as a small business owner are behind me.
0% -  I wish I had never done this. What was I thinking?

Jim’s Comments:
As you know, in the intervening years since the financial meltdown of 2008, we’ve gone from where survival was seen as success to weathering a long and laborious recovery to maybe, just maybe, starting to get some expansion traction.  Any small business owner who’s come through all of that and still in business is the marketplace equivalent of a combat veteran.

As I’ve said many times, small business owners are pathological optimists, operating all in, against all odds, often feeling very much alone, and all for the possibility of just making a living. So after all we’ve been through, and with assorted headwinds still in our face, it’s great to see almost eight of ten of you are happy to be running a small business.

Goodonya, my friends.  Keep up the good work because the world depends on you.

How will you leave your small business the last time?

Every small business founder gets to decide when they will start their small business. But when and how they leave the business is much less in their control.

There is no comprehensive research that breaks down the different ways small business owners divest of their businesses. But I have spent decades working with and observing the small business sector and, based on that experience, here are my thoughts and a few stats applied to responses we received to this online poll question: What will be the most likely exit scenario from your business when the time comes?

Almost one-third of our respondents said “I expect to sell my business to a new owner.” Sadly, this expectation level doesn’t match reality. The business brokerage industry reports that the success rate for selling a small business is approximately 20%. That means one in five of those who want to sell, will actually be sold. But more small businesses would be viable candidates for buyers if they operated with more with professional systems, practices, and recordkeeping instead of like a lemonade stand where they buy stuff and sell stuff and hope things work out.

Fourteen percent of our sample said, “I plan to convey my business to family members.” The historical experience for family business continuity to first generation is that 30% will do so. If our respondents are representative, there are several contemporary forces that could be causing this declining ownership transfer response. But it looks like business owners who have dreams of a family dynasty should be less presumptuous about that possibility in the future.

Only six percent of our folks said, “I will probably just lock up one day and not come back.” Unfortunately, like those who expect to sell their businesses, this number is probably not reflective of reality. When all small businesses are taken into consideration, from sole proprietors to those with more critical mass, most will simply turn the lights out one last time.

Our largest group, 49%, said, “I probably won’t retire, I’ll just go out feet first.” This response option was intended to be a little dark humor in two directions: 1) for those who believe they will have to work until they die; and 2) for those (like me) who love their work so much they don’t intend to retire. In any generation, this group and the one above will make up more than two-thirds of all small business divestitures.

One thing is certain about the relationship with your small business: One day in the future will be the last in your business.

Are you making plans for that last day?

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Check out my latest segment from The Small Business Advocate Show® linked below. I answer the question, What will happen to your business the day after you leave for the last time?

How will you leave your business for the last time?

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!

The small business ownership transfer challenge

One of the primary reasons most small businesses aren’t prospects for venture capital is because of incompatible thinking regarding the exit strategy. VCs expect to get their money back within a few years (less than 10 but closer to five) while a business founder typically thinks of running the business until he or she gets tired of it and/or retires.

Regardless of exit strategy goals, all business owners must think about how they’re going to exit the business they founded: selling to a new owner, going public, handing the reins to family members, or as in way too many cases, simply going out of business. But sadly, as much of a certainty as it is that a founder will exit the business, most fail to plan for this inevitability.  And the result of this failure to plan an exit often results in an expensive and painful scenario for the owner, and in the case of health problems or death, the family.

But all of this inefficiency, pain and brain damage can be prevented with a strong resistance to floating down that river called denial, plus some forethought and planning.  If you’re having trouble making this happen, your problem can be fixed by talking to professionals who know how to hold your hand and get you on the right ownership transition track, regardless of which exit scenario is most likely to be in your future.

Once you’ve come to grips with your ultimate departure from the business, you can start to accept that the way your business is operated and structured when you show up each day - let’s say, in the middle of your ownership tenure - will be different from the way it will look on the day you convey the business to the next holder of the keys, whether an arms-length sale or a family transaction.

Recently, on my small business radio program, The Small Business Advocate Show, I talked about the process of planning for the orderly and successful transfer of ownership of a small business with a member of my Brain Trust, Dr. David Gage. David is a leader in the field of business mediation, a founder of BMC Associates and author of Partnership Charter: How to Start Out Right with Your New Business Partnership (or Fix the One You’re In).

Take a few minutes to listen to this conversation and be sure to leave your own thoughts, including any business transfer stories you might have. Listen Live! Download, Too!




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