MEAT+POULTRY - September 2015 - 73

on to younger family members. Every small
meat-processing business owner and worker
knows the demands of working long days in a
cold, wet and back-straining environment.
Most of those managing these small
enterprises today grew up in the family
business, working as clean-up help after school
and learning the ropes. They recognized full
well how their parents worked seven days a
week from the beginning of hunting season to
the end of the year, with never a day off.
If that problem didn't deter the younger
family members, there were the daily,
face-to-face dealings with government meat
inspectors, most who couldn't cut their own
Easter ham or never stuffed a sausage, but
assumed total authority in the plant operations.
"I loved the business, but I couldn't take
the constant berating of my Mom and Dad by
inspectors who felt their decisions should never
be questioned by the plant owners," related one
owner's son who decided to leave the industry.
Another son who proved his mettle as a meat
plant worker was delighted when his parents
announced they would transfer ownership of
the business to him over the next five years. It
was when he told his wife the good news that
she related her belief that he shouldn't have
to work those kind of long hours. They soon
divorced, and he left to work as a meat cutter
and merchandiser outside the family business.
Flourishing meat businesses have groomed
their best and brightest to learn all aspects of
the plant, including product development and
marketing, often sending them to business
management and marketing schools, or meat
science and processing training.
Even with that level of preparation for
transition, some had to totally rethink the
planning when the management heir-apparent
developed terminal cancer or was killed in an
accident, forcing the owners to go outside the
family for someone to run the business.
Still, other family-owned meat companies
had to cope with having so many family
members involved in the business that they
had to bring in outside consultants. One
Pennsylvania firm had over 70 family members
involved and had to get "outside the box"
help to determine the five family members
who would continue the management in a
successful transition.

Another company owner in Kansas asked
one of his key employees to drive him to
the airport. He then explained to the trusted
employee that the business was failing, gave him
the keys to the pickup truck, and told him to go
ahead and run the place. It too turned out to be
a good decision, and the company blossomed
under that former employee's leadership.
We have encountered the son of a meat
plant operator who showed up at a meatprocessing convention and trade show stating
that he had a problem: "My Dad left me this
meat business, and I know nothing about
how to run it," he stated. "I think I have a real
problem."
Was it a problem or an opportunity?

LOOKING TO SELL
Over the years we have had to field questions
from individuals who said they wanted to sell
the business. Many have even offered to work
with the prospective buyer for months or, in
some cases, years.
When pressed to avoid the public auction
route to dispose of the plant, many would-be
sellers attempt to get some idea of what the
enterprise is worth. For some, the approach
they take is to get a local realtor or appraiser
to give them a hard cash number. This process
may work for some, but too often small familyowned meat processing businesses are located
in rural communities where they are the only
such shop in the area.
Typically, an appraiser will look at what
comparable facilities in the area sold for in the
past few years, determine replacement value,
taxation value, equipment value or what other
types of businesses might fit into what was
once a meat plant.
A huge part of the problem is that an owner
wanting to sell usually pulls out sales volume
records for the past two or three years and
bases the asking price on the highest sales year.
In reality, the likely buyer isn't looking at what
volume the plant did in the past, but rather what
lies in the potential for the business, what the
buyer will have to do to re-equip or renovate the
facility, and most importantly ask the question:
Is there a viable customer base that will offer a
return from a growing market to return his or
her investment?
When the potential buyer seeks financial

Flourishing
meat businesses
have groomed
their best and
brightest to
learn all aspects
of the plant.

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