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A multi-generation business gives tips on how other business owners can do so. In late 2023 the Wall Street Journal had a “Turning Points” feature article on a three-generation business and how they learned from each other.
This business had family members from age 37 to 86 and covered how they interact, learned from each other, and kept the business going after fires, market collapses, and changing product lines. Here are seven things I got from the article that can help all businesses.
- People are working longer. In this case dad is 86 and while not fully active still adds value. The article noted the labor participation of people 75 and older is double what it was in the 1990’s. This is confirmed by a recent (February 2024) article in the Journal about so many people 65 and older still working, most because they love what they do.
I’ve talked to a few owners lately and used the phrase, “What if you could slide out over time instead of exiting over a cliff (figuratively)?” The response has been great. This ties to an initial question I ask owners thinking about exiting, which is, “Do you know what you’re going to do?” Sliding out eases their mental anguish over leaving what they’ve built. Over half the deals we’ve worked on in 2023 and into 2024 have owners staying on full or part-time.
- There are different work attitudes, in this case by generation but it’s not always that way. One difference brought up in the article was how older workers often think of work as being in “normal working hours” and younger ones will run to the store at 2 pm and work on job related things at night. FYI, for years I’ve taught a class at the Seattle SBA office, and I stress you can and should blend your business and personal time (unless you’re hourly). If you’re coming back from a meeting and need to stop at a store, do so. Don’t wait until 5 pm if it will cost you an extra 30 minutes in travel time. Nobody cares if you write a proposal or letter in the 8-5 time frame or at 9 at night.
- Younger people bring new ideas, and often they’re good ideas, productivity improving, and cost effective. It can be new production methods, new product lines, etc. And it’s not always younger people with these ideas. A current client’s new operations manager is in his 50’s and he brought in numerous production enhancements to improve flow and margins.
- Technology and comfort with it are big adds from younger and newer employees. In fact, the lack of proper technology and documentation of policies, procedures, and systems is something younger business buyers look for, whether they’re an individual, private equity, or family office buyers. They look at it as opportunity to increase value in a very short time. Technology also allows for remote work. In the article it’s the granddaughter who didn’t want to leave a big city for the small-town business. She works mainly from home, and it’s been a win-win.
- We all get stuck in ruts and often it’s our marketing that’s done the same way it’s always been done. New marketing strategies (modern or tried and true) are something all businesses should be experimenting with, all the time. I say experimenting because you must test all marketing methods to see what works, when it works, etc. A quote in the article was, “We have a cool story. Make it sound like we’re the Waltons out here.” Meaning, in this case, we’re multi-generation business and that’s a great story for customers looking for continuity.
- Then there’s the age-old issue of workers, their availability, their work ethic, and skill level. Dad said he always had a pile of applications and if somebody screwed up it was on to the next one. Today, that doesn’t work. The operations manager brings in doughnuts, grills hot dogs, and he understands when employees need flexibility for their kids’ events as he has three kids of his own. A sign of value with a small business is being able to recruit and retain good employees. Buyers like that, as they should.
- We’ll come around full circle as my last point is institutional knowledge, which is why exiting owners should plan to be on call, i.e., slide out. In this case there are still consultations with 86-year-old dad on buying product, things to watch out for, etc. I’m as guilty as any owner with being an “unconscious competent” on a lot of things in our business. I just know how they’re done and don’t think twice about it. That’s were policy manuals and documenting systems comes into play. “It’s just the things you learn over the years” is the last sentence of the article and it’s oh so true. Those things can be tough to transmit to others but when done, they add value to any business.
There are lessons all around us, when we take the time to pay attention and put them in our memory banks. The good news is, as we implement them, our businesses increase in value.
For a roadmap on increasing value so you can Exit with Style, Grace, and More Money contact us for a complimentary copy of our book, If They Can Sell Pet Rocks Why Can’t You Sell Your Business (For What You Want?).