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Exit plan/ strategy and/or involving family in your business

Discussion in 'Irrigation' started by irrig8r, Aug 18, 2011.

  1. irrig8r

    irrig8r LawnSite Platinum Member
    Messages: 4,553

    So, there was this thread in Lighting a while back... I thought there was something similar in this forum, but I can't find it.


    I'm not sure what I'm going to do as my body wears out... hadn't thought about it much. Figured I'd prob'ly die some day with my wet boots on...

    But I got a call yesterday from one of my sons who is frustrated with the stress involved in his six-figure high tech sales job. I figured he was doing pretty well for only a year out of college, but although he is good at sales he hates all the time on the road (big territory), the cold calls, and the performance pressure.

    He's thinking maybe he'd like to come work for me and in so doing build up the business, meaning offering a wider range of services, attracting more customers, etc. where my strategy for the last 15 years (except where he or his brother were available in the summer)or so has been to streamline, avoid hiring help, and go it alone.

    I've talked about the pitfalls of self employment, including the effect of a down economy on consumer spending.

    I've watched other contractors expand their businesses in boom times and get locked into expensive equipment and property leases that forced them to cut back and /or into bankruptcy in lean times.

    So, basically, since I'm basically kind of risk-averse, and more of a tradesman than an entrepreneur, his idea to come in and expand the business and eventually take over makes me nervous.

    Have you involved your kids in your business or do you know anyone who has? How do you/ they work out a succession plan?
  2. irrig8r

    irrig8r LawnSite Platinum Member
    Messages: 4,553

    Hmmmm... 14 views so far but no responses...
  3. Kiril

    Kiril LawnSite Fanatic
    Messages: 18,334

    Nothing to say .... thankfully I ain't got no kids.

    Messages: 18,668

    I tried to get Audrey involved in mine but she said she doesn't get dirt under her nails. Its a risk Gregg but family is family. Rather than look at the big picture and all the pitfalls break it down. First thing you need him to do is write up a business plan in great detail how all this is to happen. Get that done and it looks doable then the next step. Build on successes and the fears will dissipate over time. It will become apparent just getting the business plan done whether this will work or not.
  5. bcg

    bcg LawnSite Bronze Member
    from Tx
    Messages: 1,865

    I've been growing on cash. The only time I finance anything is when I can get a very low interest rate, like 3.9% or less, and I keep enough cash in a high interest savings account to pay the debt off if needed.

    My exit strategy is to build a business that runs without my day to day involvement. We're still a ways away from that but we're making progress. The lawn maintenance side requires almost no input from me, other than to occasionally correct the guys and to pay them every Friday. Irrigation is all me at the moment but I did that on purpose this year after going through 2 very bad hiring decisions in the last 2 years with the intention of hiring someone early for next season (like in Feb) that I can have trained and ready to go when the season gets rolling.

    I think I'm probably 5 years away from having something that runs itself well enough that I can take a vacation during the season, probably 10 years away from not needing to be involved any more than I want to. I enjoy the back office side of this (marketing, sales growth, etc.) a lot more than I enjoy the actual work but I've got to have employees that I can rely on before I can spend all my time on that end. We could grow a LOT faster than we have if I could find good employees more easily.

    As far as family is concerned, my daughter will be 16 in Dec and she's already been told that one day she'll be the office manager unless she comes up with something she'd rather do. She's not super motivated, prefers to take the path of least resistance so I imagine one day she'll be running this ship but she's grown up in it so I believe she'll do well.
  6. irrig8r

    irrig8r LawnSite Platinum Member
    Messages: 4,553

    BCG, I haven't had to meet a payroll since I sold off my maintenance accounts to my former employees 15 years ago, but I still wake up in a cold sweat from nightmares about meeting a payroll now and again. No kidding.
  7. irrig8r

    irrig8r LawnSite Platinum Member
    Messages: 4,553

    Since he's the edjumucated college grad, with more formal business schooling than I've had, I think I should let him take the lead with that, and then just kind of guide it with some reality checks.
  8. DanaMac

    DanaMac LawnSite Fanatic
    Messages: 13,221

    Not that I have family to take over the business, but I would like to get the company to a point of running with little interaction from me. I just haven't taken the steps necessary to get there. I would like to have my two current employees work into that, but that have shown no interest in the day-to-day office operations. One may get forced into it anyway. Not knocking any of you older guys :) but this tech is mid to upper 50s, and he knows he can't do the daily grind forever either. But he has downfalls and really doesn't want to do all the paperwork and phone calls.

    I would say have your son work for 1-2 years stabilizing the company and understanding the ins and outs before trying to grow it at this time. Or if he wants it to grow, try growing with your core focus, irrigation, for now rather than buy new equipment and start up services that you have not done recently.

    I know, Pete will say spend and grow to benefit the economy, but you don't want to strain the relationship with your son if things don't work, and money becomes tight again. Actually Pete, I know you feel it is more profitable as a one man show anyway.
  9. bcg

    bcg LawnSite Bronze Member
    from Tx
    Messages: 1,865

    There were times in the beginning that I would lose more than a little sleep over payroll. The last few years we've not been even close to missing it, I've even been able to cash my own paychecks on time. :)

    I can definitely see the appeal of staying small but I'm never going to be able to live the life I want if I'm the only one doing work. I had a business before this that was really just owning my own job because I could not replicate myself. I started this business because I didn't want to be in that position anymore/again.

    Messages: 18,668

    Total net profit one man show has its limits. % net profit then the one man show wins hands down. My only argument for one man show is when this is your alternative.
    You've added debt, employees, secretary, office and you are making less or no more than what you would as a one man show but you've added a very high degree of stress and headaches. My personality would not allow me to be comfortable running or growing a business. I'm too intent on trying to make everything right for everybody. John Jr. has a much better personality for growing a business and all the risks involved. His quality will never match mine in service and I think he would agree with that.

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