American Painting Contractor Magazine

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AMERICAN PAINTING CONTRACTOR • Januar y/Februar y 2015 21 this seems like a perfect business marriage; each person is using his or her strengths. The problem is that the husband may make operational decisions that heavily impact the financial health of the company. If he prices work too cheaply or buys equipment when there is no money to fund the purchase, funds are always short. If the husband and wife teams don't act as a CFO and VP of Operations and make joint decisions, the problems can cause a shortage of cash and create conflict. Since the business is the family's source of income, the battle spills over into family life. Passing on the family business to a child can be a parent's dream, but making that happen may not be in the cards. A smaller business that is not financially successful may have been strong enough to support the founding family but not two sib- lings. I know of a situation in which owners of a business that did $500k in sales left the business to their four children. Not only were the results financially disastrous, but now the kids don't even speak to each other. In other cases, the challenge is that some family members are more capable than others, and in rare cases the business is left to individuals who do not even have a role in the business. Each of these scenarios usually leads to family conflict. Working with family also means reinventing family communi- cation patterns, which can be difficult, especially when it comes to setting boundaries. It is not uncommon for a child who has issues with accountability to also have issues with employment. In oth- ers words, it may be unrealistic to expect a child to come to work in the family business, lose all of his or her bad habits and sud- denly succeed. Worse, the founders of the business who are also parents have already developed a communication pattern that may be difficult to change. In other words, if little Johnny did not pick up his underwear from his bedroom floor, there is a good chance he will not pick up his tools at work. A possible solution is to have siblings work somewhere else prior to joining the family business. This allows children a chance to fail and make sure they are responsible for their own behavior prior to joining the family business. So what are some of the solutions for running a better family business? Try to keep business conversations at work and family conversations at home. Start a planning process that forces com- munication and public accountability. Consider hiring a neutral outside consultant to help monitor and manage the situation. Making a will and completing the legal side of succession is com- plicated, but most founders ultimately do it. However, legalities alone won't make it happen. Also focus on the management tran- sition of your business. You may find this demanding and time- consuming, but without it, the business could fail. APC Monroe Porter is president of PROOF Management Consultants, a company specializing in seminars and business consulting for con- tractors. He is also founder of PROSULT Networking Groups, devel- oped to help noncompeting contractors. He can be reached at (800) 864-0284 or monroe@proofman.com. For more information, visit his website at www.proofman.com. Sound Business Management

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