Tips for Taking Over the Family Business
Dennis asks Dave if he has any advice for taking over a 30-year-old company that belongs to their dad. Dave does indeed.
QUESTION: Dennis on Twitter asks Dave if he has any advice for taking over a 30-year-old company that belongs to their dad. Dave does indeed.
ANSWER: I have a lot of advice—a lot more than I have time to give you in one radio answer.
The first thing is I want everyone to establish whose role is what, and you separate the ownership role from your operational roles. So if you and your brothers are the owners of the company when you “take it over” but your brother Bob is going to be the CEO, then he’s in freaking charge.
The owners as a group give the CEO direction, but they don’t own every little thing during the day. They give them direction quarterly or annually or whatever. But you don’t play your stockholder card in every argument in the business. Someone needs to run the business. Someone needs to be in charge of the finances. Someone needs to be in charge of sales. Someone needs to be in charge of production. Someone needs to be the CEO. And you guys need to decide that out ahead of time. Then you need to determine as owning the thing together if one of you wants out, how do you get out? If one of you misbehaves or goes through a divorce or dies or has a disability, how is that treated? So you need good partnership documents, and a good attorney can help you put those together.