Family Run Business Success
Owning a family-run business has always been a part of the American Dream and some dealerships have been successful at this for many generations. “My great, great, great, grandfather started the company selling hand built carriages in 1859. That evolved into automobiles and eventually boats. I work with my father, my brother and my twin sister.” Said Hayden Reynolds of Reynolds Garage and Marine.
A majority of our marine dealerships are family run in some capacity, some more profitable and more peaceful than others. Here are five keys that separate the American dreams from the family feuds.
Danger # 1: Overpayment
Pay determined by lineage instead of what the job commands. Ask yourself ‘If we hired a non-family member to do this job, what would it pay?’ That is what it should pay. Period. Deviate from this and you are putting feelings above financials. Remember you agreed to run a business together. Money does not mean love. Money is a measurement for the work provided. Sometimes it is more important to do a job for what you will learn instead of what you will earn. It will pay off long-term.
Danger # 2: Underpayment
“We don’t really pay him what the job deserves because he’s building equity into the business that will one day be his”.
The trouble that has stemmed from this could fill a book. If family is ‘paid’ differently, it is license to ‘act’ differently and this leads to trouble. Most good financial books on the market advise to “pay yourself first” for many good reasons. The skills used to manage personal finance will be very similar to the skills used to manage the business finance. Give family members what the job pays – even at a young age so they can develop the skills of good money management. If you still are not sold on this, ask your tax professional or CPA for their top reasons as to why this is important.
Danger #3: ‘My last names on the building so I’m entitled to a management position
People are born with natural talents that can be developed with relative ease and other things that they will always struggle with. It is wise to discover these natural talents and find a position within the dealership that can nurture and cultivate these talents into strong skill sets to help the dealership excel. If a son or daughter of the owner is really great at their job, they will earn the respect of the staff – even if the title they hold is not ‘manager’. In fact, it is often easier to gain respect if the job produces mare tangible results for all to see – like technician, or sales person, or detail or parts counter. Excel in these positions and you will find people are willing to follow your direction. Only then are you ready for management. It is hard to be a leader if no one willingly follows.
Danger#4: Special Rules
Rules are put in place to ensure that work gets done as efficiently as possible for the profitability of the business. We expect our staff to limit the use of cell phones and personal calls to emergencies.We expect them to get to work on time and stay there all day, to park in the proper places, not use the shop for personal use, and not take the inventory or give it away. If ‘family’ is allowed to play by a different set of rules, not only does it hurt our profitability and demoralize the team but it also opens us up to H.R. lawsuits because of a lack of consistency. If you want the team to follow the rules, lead by example!
Danger #5: History
Bringing past relationship issues into the workplace can create a lot of unnecessary profit-killing drama. If there was a great deal of sibling rivalry or rebellion or fighting in the home, don’t be surprised if it shows up in the business. Some families nicely outgrow these issues and find great joy in working together as adults to help grow the family nest egg. That is so outstanding and so rare! Congratulate yourselves with a big family hug! For the rest of you, it is critical to bury the hatchet.
Go someplace outside of the dealership and talk it out. Do not mention work at all but clear the air of all family issues outside of work. Some families have found it more productive to have a third party involved to facilitate this. Do what you need to do and write-off any expense incurred. It will be some of the best money invested in your dealership.
I can hear some of you right now sounding like a badly propped motor half sticking out of the water: “but, but, but….” You can come up with many excuses as to why you should be allowed to buck these five guidelines. Knock yourself out! That is the beauty of owning your own business. Just remember: you can be right or you can be rich, you can be right or you can be happy. I’ll put my money on the family run dealerships that are rich and happy following these five guidelines to help them profitably pass the business on to the next generation.