Buyouts and Family Business

As a child I thought it would be cool to be part of a family business. It would be a guaranteed job and easy. While the idea is great as long as someone else started it I would never do it today.

Growing up I watched my Grandfather run a home based family and marriage counselling practice. Additionally he was an LDS Institute Director at American River College in Sacramento, California. My grandmother was his secretary and my aunts dutifully helped us grand-kids remain quite during the summer while we were visiting. Fast forward a many years and my Aunt Gayle and Uncle Paul have followed a similar path. Both work for local school districts as guidance counselors and do some private practice counseling with LDS Social Services on the side. At one point my Uncle even took over some of my grandfather's clients when his health was failing him. While this could have been a 2nd generation business my aunt and uncle chose to go a different direction focusing more on school counseling with the option for private practice sometime in the future. I think this has been the best decision for all involved. While my mom's family is close I can see how passing on a business to one child and not another might have caused some strife especially as another aunt has gone through a divorce and seven additional grandchildren have been added.

As we learned in our case studies this week having an exit strategy is critical in a family business. Also, clearly defining roles that each member will fill helps to keep the business and business and the family the family.  While children may be interested in the family business it is also important for them to get "working" experience outside the business so that they can really see if they are committed to the business or if they are only committed to satisfy the need of the family. Identifying the level of commitment will help a business move from one generation to another. Another aspect to consider is how the business is divided. It is salary based or is it equity based and what are the terms for changing the equity/salary.  Understanding this is important when additional employees are added that are not family. There will be many decisions that need to be made and it won't always be family making them.

$100 Challenge
I received an additional customer order this week adding $12 to my project total. I also had three haircuts instead of two netting an additional $30 bringing my project total to $132. So glad to be done with this part of the project!  I am so not a salesperson who likes to push things (even those things I believe in) on others. I am also a salespersons worst dream as 99% of the time they cannot get be to buy up or change my initial decision. I generally come in well informed and don't need their help. I met the challenge but I know I could have done more had I had a passion for what I was doing. This has reinforced the notion that owning a business is not what I want to do in the foreseeable future and I am glad to have that confirmation.

Franchising

Have you ever wandered into an establishment and thought to yourself, I can totally run this better than they can.  I will be the first to admit that I think that constantly, especially since moving to Southern Idaho. The people here are more laid back and would prefer to do things as they have always been done. I, on the other hand, prefer a fast pace environment that is always striving to improve. This week we began learning about franchising. While I have joked many times about owning this establishment or that it isn't really something that I would actually do. I am not at a place in my life where I want to devote 80+ hours a week to making a business work. I don't want to invest a lot of capital and hope that everything works out. I think franchising is better suited for younger people with little familial responsibility or those who have worked their way up through a business and it is the next logical step.

I enjoyed reading about how Baby Legs came to be. I thought it was an inspirational story of a snowboard bum turned entrepreneur. She came up with the idea to help her baby's rash and it became an instant hit. In watching this Acton Hero you can sense that while she is pleased with her accomplishment she doesn't sound confident in her new found  career. I think she yearns for the freedom she had on the slope.

Steve Jobs is a very inspirational man. He went to the beat of his own drum and always believed that it would work out for him. He was constantly revising his latest idea to make it even better. I think this is an important thing to remember. No matter how great we think our idea is, we can always improve and make it better. This helps keep us on our toes and focused on big and small picture.

After reading the IceDelights Case study I am even more leery of entering the franchise market. While there are may pros/cons I would definitely hesitate if  my investment team wasn't clearly in agreement in how to proceed. You will always have some who are more conservative than others and they often have a good reason to be. Investments such as this case involve a lot of capital and commitment. Failure can have long reaching effects.

$100 Project
This was a bit of a slow week. However, on Thursday I was tasked with finding an item for a customer that I hadn't researched before. After an hour on the internet and several calls to local supply stores I found the requested item and got a quote back to the customer. She was thrilled and promptly placed her order. Once payment is received I will add an additional $15 to my project total bringing me to $90 profit. With just a short period of time left I anticipate achieving and surpassing the original goal of $100 as I have two haircuts scheduled for this week.

Production, Operation, and Location

This week learned about Burt's Bees!  I didn't know any of this history of this company and I thought that the story was very interesting. I was surprised that a successful multi-million dollar company couldn't convince industry professionals to relocate to join them. Instead Burts Bees had to relocate to grow and attract the right talent.  As Donald Trump says, "Location, location, location."
This along with Acton Heros and e-corner taught how companies can start out with one idea and then evolve to become something new.

$100 Challenge
I wasn't as successful with my online campaign as I had hoped I would be. My goal was $20 in profit from product sales. I was only able to make $10. This brings my total profit to $75. I still think that I will be able to reach the $100 mark by the end of the project. This weekend was supposed to be my group haircut day at my husband's work. It had to be cancelled due to not getting final approval from the region. Although they liked the idea they couldn't get sign off from all the right people in the time-frame I needed. It was a good idea but has more red tape than I could manage for the scope of this project. This is definitely one of the challenges of working with a corporation instead of smaller businesses.

Entrepreneurial Interview
It was great to finally put all of my thoughts down about my interview with Jim. The greatest lesson I learned and want to implement in my life is to have a passion for whatever kind of work I do. I loved listening to the passion and excitement in his voice as he talked about his day job and his business. You could feel the passion exude from him. That kind of passion and excitement can keep an old man young. Jim has offered to review my resume for another class and he will be a valuable business connection.

Finding Great People

Great people develop themselves by aiming to be the best and consistently working hard for it.

-Charles Bates

Working with great people makes you great; you learn a lot and it also gives you the experience and confidence to move on with your own career.

Nas

This week we learned about how great people can make companies great. This is better said by Jim Collins in his book Good to Great  "...to build a successful organization and team you must get the right people on the bus."  The questions we need to ask are: Who are the right people? and How do we get the on the bus?

In order to find the right people we need to know what kind of people we are looking for. We can do this by creating job descriptions that include experience and education required, job functions that will be performed, key personality traits, company values and required timelines. We then seek out individuals who may fit out criteria. This is often done through the interview process. During this process we must take our time and not be quick just to fill a position. Doing so could stunt our company growth and be very costly. Once we find the right person we can offer them a position. As part of this process we should also consider what our exit strategy will be just in case they are not the right fit.

We can use the example of Jet Blue and its founder Neeleman who learned the industry through career choices, discovered a problem, thought of a solution and then found the best people that could help him "fix" the problem. He found people who were experts in the industry but would also buy into his dream and culture. Doing this allowed his to achieve profits in six months. This was amazing because most start ups in the industry were bankrupt within three years. 

$100 Challenge

This week has been challenging as I have only gained one additional sale this week. That brings my total to $65.

My biggest challenge is being unfamiliar with the market here in Twin Falls and not having a huge desire to carry my business beyond the point of this assignment. While I want the assignment to be successful I don't intend to stay in the business. Part of my motivation for going back to school is to make a career change. In our HMM quiz we were asked to discuss how people can make or break a company. In the service industry your clients are the company. I feel like I am doing any new clients I meet during this assignment a disservice because I don't intend to continue long term. In this industry you are dependent on repeat business. What am I saying to my clients if I only agree to service them this one time?  How does that really build a relationship?  Honestly, it doesn't.  The way I run my business also doesn't allow me to sell  my book to someone else. Clients come to you for your knowledge, skill but most importantly because you are you.

Next week I will work on my online product promotion with a goal of $20 in sales. I will be selling the products auction style (this was a feedback suggestion). I will be using two product lines Kenra and Moroccan Oil for this promotion.

Entrepreneurial Interview

My goal was to finish the final draft for this project but I put it on the back burner to do the E-myth book report instead. It is kind of silly that I didn't have this complete already as I finished the book the 3rd week of classes. I have had to go back and skim over the information to remind myself what the highlights of the book were. Joys of procrastination.