Family business problems.... Expand or die....

**crackah** · 06-18-2007 08:17 AM

Hey, our business has two sections, the investment side (mother manages) and the service side (fathers business)

My dads business is appliance repair (ovens, washing machines, driers, dishwashers, etc) , brands like Miele, Bosch and AEG. He does the expensive European quality brands, where people will want a repair and not throwout and get a new. He charges 100 for the first 1/2 hour, and 25 for every 30mins after (never goes longer tan 30min)

The issue.
He works LONG days, 12-14 jobs a day, six days a week. This means he earns ALOT of cash, but the problem is that he cannot work this hard anymore, as he is getting older (50 this year). we have an issue of a shortage in the industry, which means hiring someone, who will do as good a quality as his work is impossible, and they will just leave after they know how to do it and start their own business, and make their own money. He has tried it 15 years ago, investing alot of money and effort in training someone, and he pissed of after a year. My dad wants to work less, but cannot as he is booked a week in advanced, and has too much work. Another issue is he isnt a business man

Options
1. Sell....
2. Franchise...
3. work to death...
4. any suggestions?

at the moment we dont know what to do, and in which direction to take it.
I will be assisting him with it.

anyone know what we can do?

**Will** · 06-18-2007 09:18 AM

Get someone who will agree to a contract that if he trains them, they will stay on with your dad's the business for a set amount of years?

**crackah** · 06-18-2007 10:02 AM

yeah, problem is they wont have a good work ethic.

The business is all very precises, and ontime, he says he will be there at 1, he means it. He has found that he cannot find someone who is able to be like that.

**sboxva** · 06-18-2007 10:03 AM

Maybe he should sell up, your dad could continue to work with the business as an employee training the new owner. He could then gradually reduce his hours and retire.

Or maybe he could go into partnership with someone and as he reduces the time he works there could sell more of the business to the partner until the partner owns it all.

**crackah** · 06-18-2007 07:19 PM

Yeah, thats the thing. He sells it, and then we wont have any income from it, or atleast as much as we are getting.

This could be something 10 years down the track, but he wants to expand it,

i was thinking of possibly entering sales, but the brands he knows have exclusive selling privileges. sucks

**crackah** · 06-19-2007 03:29 AM

what we are looking for is something to revolutionize the industry.

At the moment its all just middle aged guys, doing the same as each other (although we do it better, with 5 straight achievement awards to show)

I think its time to take the next step and do something different, but we cant figure out how.

**syia** · 06-19-2007 03:40 AM

Crackah, I think franchising it is the best way. As your father already have a reputation in that business area, he can start to write lessons about how to go around doing the business and start a class. From there, each participants need to pay certain amount of money to use you father name (which is very reputable) to do business. With this, your father don't need to work so hard and can get constant income every year

**crackah** · 06-19-2007 03:43 AM

Yeah, we have looked at franchising the business. We are researched, and talked to other companies who have done it, eg an airconditioner repair company, and they say they have constant problems.

I guess really the only way to work less and get more cash is employ another people.

Sucks.

I have the idea, of setting up a help hotline, charge $2 the minute and get can problem solve over the phone.. another idea... would it be worth it?

**roadtoharvard** · 06-19-2007 03:08 PM

Has he thought about starting an educational website about the fixing process/insider product reviews/recommendations/insert whatever? I'm not sure what competition exists but if it is as you say the "middle agers" might not have ventured into this category. Possibilities to grab portion of DIY market, shopper etc. There is a possibility of earning additional monies without manual labor once he's retired also if things pan out.

Hiring someone would be the primary mode of getting your dad to work less. If he's concerned about training someone to have them go out on their own afterwards you could make them sign a non-compete agreement for a certain time span when they first become an employee/apprentice. It wouldn't entirely make them stay but it wouldn't let them set up shop around him at least. Another way could be to make them buy a portion of the business but thats a whole other can of worms

There are lots more ideas he just needs to seriously think about it.

J

**crackah** · 06-19-2007 07:28 PM

Yeah, i have thought of the idea of setting up a website and selling the prducts online....
He cannot really do the DIY stuff, as its dangerous. You must be an electrician before you work them.

I will see what his opinions are about hiring someone on a contract. Its hard finding a suitable person for it.

Thanks

**NamesCody** · 06-20-2007 12:01 AM

If you moved into a franchise and it really kicked off you would have to hire more people to help with problems the franchisees may run into and/or if they can't help someone they would probably call the "headquarters" to get the answer so you might need people round the clock for support. Which could be a bigger headache then he is having right now. Do you not have any family members who could pitch in?

**crackah** · 06-20-2007 12:06 AM

Yeah thats what we are worried about with franchising, as it will be more of a problem.

People that could help are really only me and mum.

Its hard really, as its a tough industry

**crackah** · 06-20-2007 05:03 AM

another idea is to sell of the jobs we get to other service providers, say for $20 each, how does that sound to people?

**akula** · 06-20-2007 05:18 AM

first of all, great topic. I'm very interested in best practice for family business sucession

I'm not sure if service diversification (i.e. sell of the jobs we get to other service providers) is the best way to solve your succession problem

I'm having a look at the literature in an effort to give you a meaningful answer...

**crackah** · 06-20-2007 05:20 AM

Thanks for that.

Its something which has been troubling us for a long time, as we arent sure what to do.

We (dad) went to a man who has dealt with clients such as HP and that, to structure the business and see what a appropriate course of action would be,.

he wanted 50k, we said no as he would just say franchise or hire.