Inheriting Business - Anyone Been There?

[AllBusiness09]

I've been reading these forums for quite a while and decided now was the time to jump in and start posting. I'm facing a dilemma now in my life and I need to get some outside advice from people who may have been in my situation, and I guess some background information is in order.

I'm recent graduate of the University of North Carolina at Chapel Hill (go Tar Heels!) with a degree essentially in small business/workforce management. From the get-go I decided that when I graduated, at some point I would own my own business and be successful in it. From a young age I worked in my family's jewelry business where I learned the ins and outs of running a retail store. I took on more and more responsibilities until eventually managing the business when my dad needed some time off, all before college.

Now, I'm married, have a dog, and work in a local community bank making a decent salary for our area...but I'm not happy. I want to get back to working for my family and myself, but I'm facing several problems I know will come up when I seriously discuss it with my dad (the current president of the business).

The business is in solid shape, has a decent amount of fallback savings, and has posted a profit in this economy even with big box stores and several chain stores opening in our area. However, there are some things that need to change to expand our customer base and increase sales, for instance hiring 1-2 more staff members to take the pressure off my family to do so much by themselves, establish an online presence, change the way they advertise, and upgrade the paint/fixtures/furniture in the business.

The main problem I almost can guarantee I will face will be the background of the business. For over 60 years their model of saving and using what you have has essentially worked, but in today's market you have to do more than just operate out of your storefront.

Has anyone else been in a situation like this? I feel like with the right approach I can pull it off and take the business to a new level, but I don't want to alienate or offend my family by essentially telling them that what they're doing now is "wrong" and we need to fix it. One thing I've considered is launching another location from a rented space in one of our many shopping center areas in the surrounding 10 miles or so to "prove" my ideas work to my family. I know this was quite a long post, but any advice you guys can offer would be great!

[Neustance]

Hey there,
I can actually say I'm in the same position as you. My direct family owns an automotive equipment distribution warehouse. They also have a quite steady and profitable growth now employing over 20 people. I can possibly say the exact same words you said by just changing the type of business industry, my age and marital status. Don't want to be married at 19, a supporting girlfriend is enough for now.

Anyways, my father as a lot of people at his age like to run business the classical way, only spending what they need and saving as they can. It has worked, but sometimes I used to get frustrated at how much he worked and how he limits his growth to a local market. And other usual smal stuff like not having a showroom type of lobby showcasing the latest products, etc.

One thing I have learned is how to deal with my father and how to present new ideas to him, for me its quite a delicate situation. I bet he is super proud of his business and has every single reason to be. I mean he started everything from nothing and now has become the largest in the market with a constantly growing customer base. He did this following the classic approaches, a sales team, receptionist and the usual direct mail campaign. I used to believe "well it works for him" and I used to feel awkward in telling him what I think he should do. How did I change that? First of all I run a business, and what I do is tell him how Im doing, whats the latest advertsing approach I want to employ? What is my competitor doing to keep up with the competition? I try to relate to him in that manner.

I mean he is a business owner, Im sure that he wants to keep his business running at its full potential. It shows on how much stress he has from work. Dont be scared to show him your views, the latest thing I did is offer him a website. I did a small proposal, show him that you see he can benefit from it. Dont tell him that a website will give him a better image than what he has. He built that business identity, not you, but for example tell that you think it might be a good idea to make a website so that customers can have another way to interact or search for their business. Tell him that a website can be something productive. Like for example a customer can simply email to ask a question instead of having to pick up the phone or going to the store. That a customer can even buy a product over there.

If you see, stuff like that is not changing how your dad runs its business but just a way to improve his services. Dont intent to to a complete make-over from what he has worked hard to do, just show him that there are way to improve.

Anyways I think I can relate to your story, now my father even had to buy a blackberry cellphone to keep up with his work. 1 year ago I would have never seen my father texting me via his cellphone, now he does it everytime he know Im busy. It just takes time to adapt, your are the new generation so its your job to do just that!

Hope it helps! Hope it make a bit of sense.

Good luck there!
Regards,
Francisco

I've been reading these forums for quite a while and decided now was the time to jump in and start posting. I'm facing a dilemma now in my life and I need to get some outside advice from people who may have been in my situation, and I guess some background information is in order.

I'm recent graduate of the University of North Carolina at Chapel Hill (go Tar Heels!) with a degree essentially in small business/workforce management. From the get-go I decided that when I graduated, at some point I would own my own business and be successful in it. From a young age I worked in my family's jewelry business where I learned the ins and outs of running a retail store. I took on more and more responsibilities until eventually managing the business when my dad needed some time off, all before college.

Now, I'm married, have a dog, and work in a local community bank making a decent salary for our area...but I'm not happy. I want to get back to working for my family and myself, but I'm facing several problems I know will come up when I seriously discuss it with my dad (the current president of the business).

The business is in solid shape, has a decent amount of fallback savings, and has posted a profit in this economy even with big box stores and several chain stores opening in our area. However, there are some things that need to change to expand our customer base and increase sales, for instance hiring 1-2 more staff members to take the pressure off my family to do so much by themselves, establish an online presence, change the way they advertise, and upgrade the paint/fixtures/furniture in the business.

The main problem I almost can guarantee I will face will be the background of the business. For over 60 years their model of saving and using what you have has essentially worked, but in today's market you have to do more than just operate out of your storefront.

Has anyone else been in a situation like this? I feel like with the right approach I can pull it off and take the business to a new level, but I don't want to alienate or offend my family by essentially telling them that what they're doing now is "wrong" and we need to fix it. One thing I've considered is launching another location from a rented space in one of our many shopping center areas in the surrounding 10 miles or so to "prove" my ideas work to my family. I know this was quite a long post, but any advice you guys can offer would be great!

[byzantium]

Old people are set in their ways. (I assume you guys's folks are in their 50s, which is old.) They don't like change. It's why so many businesses that are initially successful eventually fail. The Old Man says "this is the way it was done in 1980, and I REFUSE to change! This is the way I like it, and that's the way it will be! So there!" Everybody has his comfort zone, and once you get in that rut it's very hard to get out. That's why today's business owners are always trying something new, because they understand the comfort zone.

In the old days, people didn't understand. Businesses would last for generations, and do the same thing the same way always. In the old days, things went a lot slower, in part because people didn't externalize from their comfort zones much, and if they did the rest of the townspeople slapped them down. You can't operate like that now. For people used to the old ways of doing business, you have to ease them into something new.

I was around for the last gasps of this city's traditional old businesses in the early 90s, and I saw some of these places. The one that sticks out in my mind is Newbert's Hardware, on 17th and J in midtown Sacramento (now home to a used record store). By the time it shut down in 1992, it was more a museum than a functioning hardware store. Much of the merchandise hadn't been touched in many years, and had a thick layer of dust. A lot of it was farm implements and such, utterly useless to inner city dwellers. Employment notices from the 1930s still were tacked to the walls. A workbench fan hadn't been turned on in ages, and was black with dust. It was little surprise that Home Depot ate their lunch.

The closest thing to an "old fashioned" hardware store we've got now is Cook's in North Sacramento. But they actually stock stuff people use, and since they're in the ghetto, there's not very many places to buy appliances or furniture or the little things that are always breaking in 1920s era homes. If your folks' business is like Newbert's, more a curiosity with some very old customers, it's time to change.

[CDRamming]

A thought would be to propose to your Dad that you establish an online presence for the jewelery store. Basically offer the same items in the shop online and you can handle the planning, implementation and operation of the website. This would be better than starting a business across town, because you wouldn't have overhead of products that aren't already carried in your father's store.

I don't think he would complain if you are moving more products for him. While you are doing it in your own way, he does not have to change the way he does business. If you made a sale you could get the item from the shop and ship it to your customer and pay your father. You could work out the profit split together.

As Neustance stated make sure to keep the image and identity your father created intact, so work with him (or atleast let him approve) as you design the website and marketing materials.

If you are successful in providing the online presence you can suggest other things to your father and if he is still very strict in terms of saving money, suggest that the revenue from online sales be used to accomplish some of the ideas you have. As without the idea, that revenue would be non-existent.

Establishing a functional e-commerce site can be done relatively easily and inexpensively. Save some money and with your fathers permission make the online store your project, and if you are able to increase sales significantly and would be content with the income from the online operation leave your job at the bank.

I think this would allow you to carve your own niche in the family business without alienating your father. If you believe this approach would still alienate them, save your money, do the online thing on you own and pay your father a finders fee to utilize the supplier contacts he has already. I think opening your own brick and mortar store would alienate the family much more than an online extension of the family business or of your own, because it wouldn't be direct competition with your father.