All Posts Tagged: family business
Keith Hawkyard went from being an insurance agent to a computer consultant to a turnaround expert for an electrical supplies wholesaler in California’s Central Valley. He stepped in to help his father-in-law turn around REDCO Inc. after an investor in the business nearly ran it into the ground. Ten years later, Keith is still helping run the business, and his son Tyler emerged in recent years as the heir-apparent to the company, which is also a Bank of the West business customer.
In this interview, we explore some of the inter-generational challenges that emerge when the topic of succession planning is on the table. Keith and his family have managed the double challenge of navigating the succession planning waters while turning around the finances of the wholesale business.Q: What lessons have you learned from stepping into your family’s business? A: For a very small business like ours, there is a lot of emotion and a lot of history that gets mixed into business decisions. It wasn’t easy, but I just didn’t want my father-in-law to end up with nothing after so many years of trying to keep this business going. When I originally started helping him out, it wasn’t my plan to still be doing this job today. A common concern in succession is that the customer relationships and knowledge will be lost in transition when the owner retires. Is that a concern for you?
When you’ve got all the family dynamics involved, everything is more complicated. I’m giving my son as good a foundation as I can for running the business, sending him to school, and giving him guidance on the sort of courses he needs to take. Fortunately, he is now the guy who customers know and trust.What are some of the tips you would give another business owner who hasn’t thought about succession planning?
You need to have a crew in place that will allow succession, because you do have to plan for it. If Tyler wasn’t here and didn’t enjoy the business and wasn’t good at it, I would have a different plan than passing it along to him.What do you think is an optimum timeframe to plan?
You have to recognize your own mortality. At some point, you just have to sit down and ask, “OK, what’s going to happen if I die in the next year? What do I want to happen?” And if you want to have a successor, then you need to begin working on that the next day when you wake up because you don’t have any control over when that’s going to happen.Why do you think many wholesalers put off succession planning?
No one likes to think about their own mortality, and this is a very rough business right now. The market changes are absolutely brutal for small business now, and sometimes you wonder if you’re going to be in business next year. You have to come up with a plan to keep your business open along with a plan for succession, and that’s very difficult.From just an emotional standpoint, is it important to hand off the business to your son as opposed to some other scenario, such as liquidation?
Oh, absolutely. There is a lot of history here, and that had a real impact on the decisions I made. When I started working here, I went down to the Better Business Bureau. After reviewing our books, they advised filing for bankruptcy, and that was not an option for me.
I feel really satisfied about where we are right now, and the fact that now there is something to pass on. I would have been heartbroken probably if Tyler hadn’t wanted to do this, because the legacy aspect of it is very powerful to me.
For more tips on succession planning, see our latest report, “Smooth Transitions: Three Steps for Wholesaler Succession.”Read More ›
I like the way Theresa keeps family dynamics and business needs in perspective, and her emphasis on values can help us all.Read More ›