National Clothesline

ecently, one of my clients sent me the book, Sustaining the Family Business, written by Marshall Paisner. The author and his wife grew a successful car wash business while raising three kids (readers in New England may be familiar with his business — ScrubaDub Car Wash). This book is of particular interest to me because more than 70 percent of my clients have family members in their business.

In this book the author explains his philosophy regarding: what the children who want to join

the business need to do; the real value of a family business that stays in the family; and several different ways to structure the sale of the business to the children.

Early on, Paisner got the family involved by bringing his work home with him. This is something that some owners refuse to do. As Paisner puts it, “I began preparing my children when they were very young by trying to convey that the hours I spent away from them were devoted to an effort that I was very proud of… My enthusiasm must have been infectious because everyone got involved.”

Here the author talks about his pride in his business and his enthusiasm. We all start out with a great deal of pride and enthusiasm but sustaining it is a tad more difficult. I think it’s almost impossible to sustain pride and enthusiasm over the long term if you do not have someone to share it with.

Paisner tells about being on a business trip and noticing a car wash manager who was wearing a shirt and tie. When he got home he told his family the story at the dinner table. He told them that he didn’t think that a manager wearing a tie in the car wash business was very practical.

Paisner writes, “Through the course of several family discussions, we (the family) decided to put all our employees who dealt with customers in a company shirt and tie. This important family decision, which was made at our dinner table when our children were 10, 12 and 15 years old, helped create a new value for our family and our business.” It is this type of sharing with your family that creates synergy and sustains the enthusiasm.

Another thing that the author talks about is insisting that the kids work for someone else before joining the family business as a full time employee. Anyone who knows me, knows I’ve been preaching this for years. As parents, we all want what is best for our children and we would like life to be easier for them than it was for us.

As a result, too many parents refuse to insist that their children gain the experience, both joyful and painful, of going on job interviews thus sparing them the inevitable experience of being rejected before finally landing a job. But successfully finding a job then gives them the experience of learning what it is like to work with and for strangers in an unfamiliar environment. These are invaluable lessons about life in the business world.

I know many sons and daughters and in-laws and out-laws who are doing very well in the family business without having worked somewhere else. The difference is that without “outside” experience their learning curve is often longer and more painful for all involved.

Paisner goes on to talk about the value of a business when it is sold to outsiders and the value of a business when it remains in the family.

He writes; “we need to come to a new understanding of a business’ value. If our primary goal is to pass on to our children the life that the family business has made possible for us, then we need to communicate to the next generation the idea that market value is only the score of the game and not the goal. Far more important, to my mind, than the dollar value of the company is its family value — with all the attendant opportunities and benefits.”

The bottom line here is that after your children work outside of the family business, they will come to understand what it is like to be an “employee” for someone else and how limiting that is. They will also develop a new appreciation for the family business. You and your children can make much more money in a successful drycleaning business and have a more flexible lifestyle working for yourselves.

Another, more agonizing, issue for the family business is family conflict. Family conflict cannot be avoided. Once you are willing to accept this reality, and the sooner you are willing to discuss these conflicts openly and honestly, the more likely you will be in a position to avoid a disaster.

Not all of your children will be interested in joining the family business. The ones that do join it will not be making identical contributions to the company. Because of their personal circumstances with spouses and children, they may not work the same hours.

Your childrens’ compensation should be based on their contribution to the company — not their age or their seniority. When this becomes an issue, and it will, it is time to bring in an outside expert for an unbiased evaluation.

Paisner invested a great deal of time and effort in developing a succession plan that would be equitable to every family member involved in the business. In this book, he has unselfishly shared his wealth of knowledge and experience; his successes and mistakes.

No two family businesses, no matter what the industry, are identical. But this book, Sustaining the Family Business, provides one of the best blueprints for a succession plan I’ve ever come across. Even if you do not have children or other family members in your business, this book is a must read.

I’d like to thank Gary Biela of Sentry Cleaners, Chicopee, MA, for sending me this book. Gary learned of this book through the University of Massachusetts Family Business Center where he attends their many educational programs for entrepreneurial families. This book can be purchased from any of the online booksellers.

In the game of business the more you know the better you can play the game.

Alan Robson is a private consultant dealing with the specialized needs of the drycleaning industry. Contact him by telephone at (941) 408-8819 or send e-mail to him at: alan@bizbuilderonline.com or visit the Biz Builder web site: www.bizbuilderonline.com.