Digital Dealer - January 2018 - 14

O WN E R S H I P

Continued from pg. 13

WITHOUT A UNIFIED VISION FOR THE FUTURE
AND PLAN FOR GETTING THERE, THEY QUICKLY
REALIZED THERE WAS NO TELLING WHERE THE
BUSINESS COULD END UP."
exit strategy and vision for
the future
 Implemented strategies to avoid potential
relationship damaging
deadlock between the
partners
 Identified three independent professionals to
sit on their board of directors to vote on strategic
issues
 Refined Shareholders' Agreement/Operating
Agreement for "Issues
of Major Importance"
to specify issues needing a super-majority or
unanimous vote, such as
compensation changes,
buying or selling the business, and capital expenditures above a certain
dollar amount
YOU CAN'T RUN
A FAMILY LIKE A
BUSINESS AND
YOU CAN'T RUN A
BUSINESS LIKE A
FAMILY

Family and business
are an oxymoron. Family
is an environment of love
and acceptance, where
business is an environment of "what have you
done for me lately?"
Without developing and
implementing family
governance policies, the
family business oxymoron
can become the Pandora's box of emotional
stress in the family and
business. With friend and
family member interest in
the business increasing,
Bob and Joe developed
Family Governance Poli14

JANUARY 2018

cies, including:
 A Family Member
Employment Policy outlining criteria to be considered for employment in
the business
 Family Member Performance Criteria communicating what is expected
as an employee
 A Perks Policy that
indicates what benefits
are available to employed
and non-employed family
members from the

 Created a unified
strategic vision and implemented key programs
needed to improve performance such as:
 Acquisition strategy for evaluating deals
within a geographical
area, brands that had
similar core values, and
number of units and types
of brands that corporate
structure could effectively
manage
 Recruitment and re-

...AMICABLY DISCUSS
AND DECIDE BUSINESS
DIRECTION WHEN
THERE IS DIFFERENCE
OF OPINION."
business
Now that you have considered what your future
might hold and put some
perspective on it. Knowing
what Bob and Joe went
through earlier, here is an
outline of where they are
today:
 Bob and Joe now
have a Deadlock Provision that allows them
to amicably discuss and
decide business direction
when there is difference of
opinion
 Developed exit
strategy for each partner
which provides opportunity to develop successors,
develop financial independence from business and
puts both partners at ease
that one will not be left
carrying the ship while the
other sails away

D I G I TA L D E A L E R . C O M

tention strategy to attract
good people and provide
development opportunities from the store all the
way up to executive level
management
 Implemented Family
Governance Polices providing clear expectations
to immediate or extended
family specifying what
is required to participate
in the business. One
of the owner's daughters has since entered
the business, after she
fulfilled a few criteria, and
is currently successful in
her role and gaining the
respect of employees
and managers. A "family
friend" ended up opting
out of the opportunity, as
he realized employment in
the business would not be
a cakewalk to a new boat

and vacation home.
Because of Bob and
Joe's family business
ownership enlightenment,
they have proactively
achieved results to benefit
their business. They can
now amicably discuss and
decide on business direction thanks to a Deadlock
Provision. They each
have an exit strategy and
a plan to develop their
financial independence
from the business; all
while providing opportunity to develop successors.
Their roles have been
clearly defined and their
business vision unified,
so no one person is left
shouldering the brunt of
the work alone. Lastly,
they implemented Family
Governance Policies, so
they can bring in the next
generation of leaders and
owners in a structured
and clearly defined way.
These results will help to
create long-term stability
for the business and lay
the groundwork for future
growth, so Bob and Joe
can enjoy the business
they've built.
KENDALL RAWLS knows
and understands the
challenges that impact the
success of an entrepreneurial
owned business. Her unique
perspective comes not
only from her educational
background; but, more
importantly, from her
experience as a secondgeneration family member
employee of The Rawls
Group (www.rawlsgroup.com)
EMAIL: info@rawlsgroup.
com.
http://www.rawlsgroup.com http://www.DIGITALDEALER.COM
Table of Contents for the Digital Edition of Digital Dealer - January 2018
