Step Aside

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Q&A

Question:

How do I make it through the hard times?

Answer:

Richard lost his passion for the business and rather than try to keep plodding along while holding the reins of power, he made the decision to completely step aside. David was only 19 years old but his energy and enthusiasm with guidance from his Dad proved to be a winning formula. David brought a new and broader vision of expansion to the company.

Q: What does a business owner do to ensure that his business is carried on?

A: Legacy planning is one of the biggest challenges a business faces. In another espidoe of the show about Medallion Financial, we saw them handle three critical success factors extraordinarily well.

Don't Just Hand over the Keys. Andy's grandfather worked with Andy's father and Andy's father worked with Andy. Each successor was carefully groomed to take over the reins. This is critical to ensuring a smooth transition.

Respect the Heir. No one will make the same decisions that you would have made and choose the same path that you would have chosen. Don't hamstring the legacy by expecting to clone yourself.

Keep Disagreements Private. The keys to the Executive Washroom are best passed over gradually and there will be disagreements during the transitional period. Neither employees nor customers should be aware of even the remotest hint of conflict. Conflict is natural and healthy as the legacy is implemented but is best kept private to ensure that its significance is not overstated.

Think About It:

If your exit strategy includes an established legacy, do you have a legacy plan and a timeline for its execution?

Transcript

Our motto is `Serving Satisfied Customers.'

HATTIE: `Serving Satisfied Customers.'

RICHARD: That's right.

HATTIE: When did you come up with that motto?

RICHARD: When we first started.

HATTIE: So that was way ahead of the big customer service craze that's going on right now.

RICHARD: That's right. That's right. In other words, a satisfied customer always gives you future business.

HATTIE: Tell me about some of the big obstacles to the growth, some of the lessons that someone who's thinking about starting a business today needs to learn.

RICHARD: Well, now, we did not get this big until I decided to turn it over to young blood, which was my three children, David, Howard and Diane.

HATTIE: Right. And your father said,`OK, kids, I'm out of here. You do it.'

DIANE (Richard's Daughter): Right. He just kind of like, life hit him in the face and he said that he was taking a permanent retirement. And he said, `Take over.'

RICHARD: They are responsible for the growth, not me, because I've retired out of it and they own it lock, stock and barrel.

HATTIE: (Voiceover) David was 19 when his mother died and his father asked him to take charge of the business.

When you and your brother and sister took over the business, your father was doing about a half a million in sales. And he said he had one little hut for general administration, and now you've got all these people, over $5 million (in annual sales) ...