Fifty, 62, 77, 93, 99, 144. These are not lottery numbers, but rather are the number of years some truck parts distributors have been owned and run by the same family. Those are amazing numbers given the statistics about how many businesses fail after being passed from one generation to the next.
While researching this issue’s cover story (see page 16) I learned that 30 percent of family businesses successfully transfer from the first generation to the second, 13 percent from the second to the third and one percent from the third to the fourth.
So what is it about truck parts distributors that has them beating the odds? I think it is three things: planning, passion and respect.
The family business experts I interviewed for my article told me that many, if not most, family-owned businesses do not have succession plans in place. Business owners don’t want to think about retiring and therefore they have no exit strategy.
Unfortunately none of us lives forever, and failing to have a plan for the orderly succession of your business could result in your business failing should something happen to you.
The distributors I spoke with all were part of succession plans by their parents, who in some cases were part of the succession plan of their parents.
Simply put, if you want your children to take over your business someday you need to not only prepare them to do so, you must develop a written plan that lays out your desires.
And you need to do it sooner rather than later.
Distributorships that have lasted for generations brought their children into the business early, most often starting them at the bottom and then having them work through the various aspects of the business so they would understand it completely.
Your business is greater than any one individual.
I also suspect they did it so other employees could see the work ethic of the heir apparent and know they were not just getting the job because they had the right last name.
Talking to distributors their passion was evident, not only their passion for their business but their passion for having the next generation involved in the business.
They talked about the fact that the younger generation is where ideas for growth often come from. Seems to me they remember when they were the young bloods full of enthusiasm and ideas. And while I doubt they let “the kids” implement every idea they have, the culture of the businesses allows for innovation and change.
I also sensed a great deal of respect in these businesses, respect for what past generations had accomplished, respect for the prevailing culture, respect for the dreams of the next generation, respect for the family and most of all respect for the business.
This has sometimes meant that management has had to make tough decisions about who would be promoted and who would not be.
But they were willing to make those decisions because they all realized as Mike Betts says, that the business is greater than any one individual. Even the current owner.
If you want your business to stay in your family for 50, 62, 77, 93, 99 or 144 years, now is the time to start. Get working on a plan, share your passion for the business with the next generation and respect both what brought you this far and what will keep your business going and going and going for generations to come. ■
