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

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

  1. SoCalLandscapeMgmt

    SoCalLandscapeMgmt LawnSite Silver Member
    Messages: 2,129

    Your story sounds very familiar to mine Greg! I had been working for my dad off and on since I was 16 and part time while I was in college. I really had no idea what I wanted to do and no matter how hard I fought it I still found myself being pulled back into the family business because I really enjoyed working in landscape. When I was about 22 or 23 I came to work for my dad full time and at that point started trying to really grow the company. At one point in the 80's my Dad had built a pretty big operation but after the recession and loosing a key manager the company kind of languished for most of the 90's. I remember asking him what his long term plan was and he told me that he didn't really have one. He said he planned on running the company until he was no longer able and then sell off any remaining assets. By this point he was pretty burnt out. I remember thinking that his plan was pretty sad.... he had worked his entire life building this company and he was just ready to let it all go. Just as things were starting to happen he died suddenly of a heart attack in early 2002. By this point I was 26 and had spent most of the last 4 years working just about every single field position in the company. Maintenance, Irrigation, Construction, Supervisor etc etc. I knew all of the field operations forwards and backwards and my dad ran all of the back end of the business. Very quickly I found myself behind a desk instead of in a truck. It was quite the abrupt learning experience. By 2008 I had taken the company from 9 employees and $340K in revenue to 50 employees and over $1.5mil in revenue. I learned a lot... some of it the hard way.... but we're still here and the trucks still roll out every day.

    I guess my advice would be that if you son wants to get involved make him start at the botttom (sounds like he already has some field experience) and learn the basic operations of the company. Once he learns the field end of the operation make sure he knows the business end. Luckily I knew enough of the basics to keep us out of trouble. The other thing would be to have a clear plan for the change in ownership if your company is a Corporation or an LLC as well as a contingency plan just in case one day you're suddenly not there anymore. We had none of that and it made things difficult as we transitioned the ownership of the company to my name. If he intends to grow the business make sure you have a solid map and a written plan. I didn't. It was all in my head and changed frequently which in hindsight was a really stupid way to grow. Pick one or two areas of focus for expansion. When my dad was around we did everything. At the peak of the boom a couple of years back we walked away from commercial construction and focused solely on commercial maintenance. everybody told me i was crazy..... they don't tell me that now. It's better to do one or two things really well than to do everything all halfassed.

    I think it's great that your son wants to be a part of your business. I'd say let him come on board and see what happens. You'll still be in control of the thing so you can make sure that nothing crazy happens and if things progress in a positive direction you can slowly turn more and more control over to him as you get closer and closer to thinking about retirement. My dad was very much like you say that you are in that he tended to be very risk-averse but he did let me have some freedom to make big decisions. I've made some HUGE decisions that I know he would have never made but I think he would have understood even if he didn't agree with them. I wish that he was still around because he taught me 90% of what I know about the business and there are still things that he could teach me.

    That said.... Good Luck!
  2. SoCalLandscapeMgmt

    SoCalLandscapeMgmt LawnSite Silver Member
    Messages: 2,129

    Oh and if he comes to work for you I would immediately add him to your contractor's license so that if and when the time comes he'll be able to qualify for a license without having to take the test and all of the nonsense.
  3. irrig8r

    irrig8r LawnSite Platinum Member
    Messages: 4,553

    Thanks for sharing your story. It's given me a lot more to think about.
  4. txgrassguy

    txgrassguy LawnSite Gold Member
    Messages: 3,083

    My plan, briefly stated, was to grow my business to the point I was strictly a "hands clean" supervisor. At one point I was up to ten full time and three seasonal laborers and was grossing right at $985K with a net profit averaging 11%.
    Then along came the train wreck of my divorce, over $600K lost coupled with a severe initial down turn in the economy - meaning now it is me and one guy five years later.
    Net profit is way up but my hands are now quite dirty.
    And my exit strategy vaporized with all of my capital.
    Some of you may know I was approached by a national chain wishing to absorb my client base and equipment assets. The idea being I would remain on staff, as a salaried manager, while transitioning the accounts as well as offering what ever input I may have after twenty years in this industry.
    Then along came the irs thanks to my ex-wife - however it appears that this may end on more or less sufficient terms. Meaning I may be able to sell off the business and get a pay check along with the buyout.
    While I am nowhere near to recouping the losses associated with these two nightmares, if I can sell (which does appear likely) than I will finish the transition period and do one of four things in order of probability.
    1. After the transition period simply resign and once again become a full time sworn peace officer. The local Sheriff and I have developed quite a rapport so I may just end up in a Detective Bureau again.
    2. After the transition period begin to aggressively research acquiring an up-scale private golf course to manage. Only this time off shore in some Asian country.
    or 3. Agree to teach college at the under grad level while finishing a Master then a Doctorate.
    or - and this is becoming much more attractive all of the time - after the transition period take my 4X4 truck and relocate to some Central American country with a high Americanized expatriate population and work for some wealthy people and enjoy the warm seas.

    Messages: 18,668

  6. txgrassguy

    txgrassguy LawnSite Gold Member
    Messages: 3,083

    Ah, I'm just tired tonight. Got back from yet another callout involving people so stupid they shouldn't be allowed to reproduce. Since the beginning of August I am at sixty-four hours on different fires and it is beginning to wear on me a bit.

    Messages: 18,668

    You need a Mizzou River fishing trip dude. The hoppers are starting to get active.
  8. Mike Leary

    Mike Leary LawnSite Fanatic
    Messages: 23,148

    Seems pretty normal to me.
  9. RussellB

    RussellB LawnSite Fanatic
    Messages: 8,383

    My youngest son is in his last year of college. If when he gets out he decides he wants to get involved in my business and grow it, I will stand 100 percent behind him. In fact I hope one or both of my sons gets involved.
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  10. txirrigation

    txirrigation LawnSite Senior Member
    from Texas
    Messages: 977

    Just make sure he understands this:

    Business is Business

    Family is Family

    I come from a family of all self employeed Men who have at one time or currently employeed family members. When at work they called each other by Name, not Dad, Son, etc. Any business disputes stayed at work, and business talk was not allowed at home. Draw CLEAR boudries up front so that you do not hate each other in the end.

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