How do I ensure a healthy family business succession
Q AI AM 62 and run a successful business. There are several members in the family, some of whom are involved in the business and others not. How do I raise the subject of succession and inheritance? THIS is a subject and close to my own heart and pretty much a replica of what we had to go through. In my case the most important starting point was to have the conversation. Get the whole family around the table and openly discuss every single aspect.
There were all sorts of practical questions like who wanted to be involved in the business going forward? Who would inherit what parts of the business? Should one of the family run the business on behalf of the others? All of these needed to be carefully discussed and each person’s views taken on board.
We actually produced a document which would guide everyone in the future. The purpose of this was to ensure that everybody’s views were taken into account and we were able to create what we called the ‘Quinn family constitution’.
This was an 8,000-word document which really took out any ambiguity as to what would happen in the future. I have seen in so many family companies huge rows developing after the founder moves out of the business. In our case, all of these conversations were able to be had in an amicable fashion and respecting everybody’s viewpoint. We also took the decision to use a third-party succession expert. He was invaluable and most importantly was not emotionally attached to the family or the company. He also brought in valuable experience from working with others and lots of solutions we would never have thought of ourselves.
My key message is to start having this conversation with your family. If you leave it too late and it will become extraordinarily difficult and could create unnecessary problems in the future.
Q AUNTIL recently I ran two separate businesses. One continues to be really successful, the other failed and I was forced to close it. I am really questioning my ability after this. Any advice you can give me? UNLESS you are trying new things, you will never experience failure. To fail at something is not to be a failure personally and you are confusing business and yourself.
Quite clearly you are a successful business entrepreneur and have a thriving business. I learnt this lesson many years ago. We had seen a trend in America where some of the supermarket groups had their own supermarket-based bank.
These banks were very successful as customers found it really convenient to do their banking while shopping in the supermarket.
In 1999, Superquinn in partnership with one of the banks opened TUSA, the first supermarket instore banking service in Europe. Very quickly despite having all of the staff and infrastructure in place, we found we were doing little or no business. Initially we couldn’t understand the difference between the American model and our inability to make it successful
The answer was in America, you could apply for a loan as you entered the supermarket and have it approved by the time you got to the checkouts. Due to strict Irish laws against money laundering, we had so much paperwork to do, that it negated the convenience of having the bank. Eventually we had to pull the plug after incurring heavy losses. While the concept failed, it didn’t mean that the team were not great business entrepreneurs – they all continued to run Superquinn successfully.
In the same way, you need to separate your own personal skillsets from the unfortunate closure of one side of your business. I would compliment you on trying new things. Don’t be overcritical of yourself. You are a successful entrepreneur – don’t forget that. Send your small business questions to himself@ feargalquinn.ie