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WARDDEN-PB 2015_5

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WARDDEN-PB 2015_5

  1. 1. 1 Perpetual Business 5 WARDden.com T he success of your business is predicated on its ability to transform what’s on your balance sheet into profits on your income statement. That transformation can only occur when your standard operating procedures are consistently executed by your employees. Your assets are merely the “stuff ” you own, while your staff spins it into gold (profits). Nurture your staff, for as Harvey Firestone exclaimed, “It is only as we develop others that we permanently succeed.” Your people are the foundation of a Perpetual Business. Owners often ask me if they should be forth- right with their employees about planning for the eventual sale of the business. They worry that their employees might fear for their job security. My response is unambiguous, the truth is not to be feared, but embraced as a powerful sign of respect for your people. They’re smart. They know that you will not live forever, and that you want a life beyond your career. Including them in your mas- ter plan creates confidence in their future, encourages longevity, fosters teamwork, and lights their own path of career development. Inclusion transcends the “owner / employees” culture into one of “owner / partners.” Em- ployees tend to think singularly, “themselves” whereas, partners work together to a common purpose for the benefit of the entire company. Partners benefit mutually. Starting an inclusive dialogue is really quite easy. It sounds something like this; “I’m working on my plan for the future of (business name), so that it will continue to prosper when I’m no longer the owner. You’re an important part of that plan. I value your contributions and want to properly consider what’s important to you and your family. Where do you see yourself in the next 5-10 years and what are your aspirations?” Just that easily, you’ve introduced the concept of a Perpetual Business, reinforced the value of your people, made known that their career goals will be considered, and established that your process will continue to be communicat- ed as it develops. Now, rather than fearing an opaque future, a heightened sense of trust allows your people to focus on building a healthy, vibrant busi- ness that also fuels their career objectives. At the same time, your desire of increased prof- its, improved employee stability, enhanced enterprise value, and a legacy that survives your departure becomes reality. When you have succeeded, your Perpetual Business will always be ready for sale or expansion, at your option and, on your terms. A Perpetual Business cannot occur by luck, accident or happenstance. It must be deliberate. Every plan has a begin- ning. Yours can start today. If you want us to help, start by getting our Perpetual Business Owner’s Guide, our complimentary contribution to your future. We’re just a “click” away: www.wardden.com. What happens when you include your employees in the master plan for what happens after you move on from the business? We discuss the benefits, dynamics and profitability here. Inclusiveness Inspires EMPLOYEES CRAVE INCLUSION Promoting Powerful & Profitable Partnerships Inspiring Owners to Build Companies That Survive! PERPETUAL BUSINESS
  2. 2. 2 Perpetual Business 5 WARDden.com Doug Youngdale, owner of Gerber Auto Care, is taking his time to make sure that he and his potential successor’s goals remain aligned. O ver the years I’ve been to several hun- dred sales and the old shop owner is sit- ting there in the corner, tears running down his face, and he’s watching everything he’s ever owned go out the door. That’s not gonna be me.” Right out of college Doug purchased a one- man auto shop. 43 years later, Gerber Auto Care is thriving, topping a million dollars in sales last year with 8 employees on the payroll. “You’re supposed to say, ‘how many employ- ees you got working for ya?’” Doug jokes, “And I usually say, ‘About half of ‘em!’” He’d like to get all of his employees more in- vested in the profitability of the business. But right now, he’s focusing on his key employees, with the goal of establishing a successor who is “all in.” “You get shop owners that are 65, 70, years old and get sick, or for whatever reason nobody’s gonna buy them out and they have an auction and they’re just selling all their personal possessions. [Gerber Auto Care] has been here forever and I’d hate to see it just go away.” About a year ago, Doug planted the seed with two of his key employees. “Sat down and talked to ‘em and let them know that I would be interested in passing it on and that I would try to help them with the process.” Without a lot of direction, they tried to work out the business valuation and figure out financing. “We even went as far as to try and go talk to the bank.” But, the potential buyers didn’t have enough capital for a down payment so “it kind of threw a funky wrench in the gears. We’re back to square one and the employees are pretty disenchanted over the whole thing.” Doug sought expert advice. “The valuation of the business was wrong and the lining up of the financing was wrong. So now I’m trying to back out of that and start over again.” One of his potential buyers is still interested in giving it a shot, a key employee who has worked with Doug for 12 years. Their little town is just 7,000 residents and they all know everything about everybody. “So for an out- sider to come in that would be a little tough,” Doug says. “I feel that I’m the top trusted shop in town and I would like someone with the same moral thoughts as I do so they don’t come in and turn the thing upside down and get everybody wound up.” However, “there is plenty of room for growth and I’m after that new energy or excitement,” that a transitioning owner can bring “to make it more profitable for me and the next person.” Doug is having weekly conversations with his potential successor to make sure their goals remain aligned. The next step requires getting the revised, accurate, business valuation. “Now I don’t know if the figure I’ve thrown out there, if it’s too high or too low or whatever. It’s gonna all change one way or another…then we’ll have to come up with a plan to help the employee slowly be able to buy in.” Although Doug is excited to have more time for travel, he has no intention of handing over the keys and skipping town. He’d much rather spend time training his successor, even staying in contact as an advisor once the sale is final. “I’m 63 years old and I’m healthy. I work 12 hours a day, 6 days a week and I love it. So as far as me just hangin’ it up and doing nothing, that would be an impossibility.” Getting the right person and the right plan in place in the next 6-12 months is integral. “I’m gonna have some kind of a plan to move it along and keep the name going.” Then, he can back off the day-to-day decision-making, “but still be involved for a few years and leave at my discretion.” “I’m not there yet,” he sighs. He needs a commitment from his successor. “I’ve gotta have somebody in place to say, ‘Yeah, we’re gonna do it.’” Book Bob Ward to speak at your event. Discover more online. Published by WARDden, LLC Seattle, WA 775.553.8899 All rights reserved. Founder, Bob Ward Editor in Chief, Wendy Sloneker Contributing Writer, Elizabeth Ward Visit WARDden.com, your source for tools, courses and events. Second Time’s a Charm DOUG YOUNGDALE: GERBER AUTO CARE: WEBSTER CITY, IA Perpetual Business will check back with Doug in a future issue to find out if he, and his successor, are “all in” on the new plan. Doug’s Action Items • Talk to key employees about succession opportunities • Have a conversation with potential successors to align goals • Get an accurate business valuation • Establish a successor’s full committment 90% of businesses fade away or liquidate

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