Two mates went into business with each other. They had their highs and lows. They learned a lot and gradually transitioned to life in Family Business.
The business was going OK. They were earning a reasonable living. Not fabulous, but not on skid row either.
However, something just wasn’t right.
They weren’t talking to each other. They had different parts of the business they looked after. In some ways, they didn’t need to talk with each other. But not talking to each other means there are elements of business life that aren’t discussed. They get left alone. Ultimately, it becomes like a bad marriage where spouses just don’t talk with each other anymore.
As their key advisor, Dean could see this happening. There was a bit of sniping – not a huge amount. However, it was the classic case of having grown apart. And they were never in the room together with us for it to be confronted.
So we changed tack. Dean called them in separately. And he told them what we thought.
A business can’t survive if the owners aren’t talking with each other.
A business can’t survive if you’re not heading in the same direction.
A business relationship is like a marriage – except that you head home each evening and sleep in separate beds.
You need to do something about this before the situation moves from not talking to hostile warfare.
As their key advisor, it was a challenging thing to do. But Dean couldn’t not do it. He could see the business was going to be in serious trouble before too long.
Each meeting went brilliantly. Each business owner individually acknowledged the problem.
They also acknowledged that something needed to happen.
And they looked to Dean to help offer a solution. Thankfully, he’d spent some time considering options prior to each meeting. So, each business owner left the meeting not only with a resolve to do something about the situation, they also had some options they could consider.
A further meeting was convened by Dean. This time the business owners both attended. We discussed the options – and a resolution was achieved.
It was agreed to split the business and for each owner to take their side of the business and run it themselves.
Some cash changed hands – to recognise the fact that they each controlled different sides of the business that contributed differently in terms of revenue, costs and profit. And, an amicable parting of the ways took place. It was a business divorce that went ahead with no back biting and with each business owner excited about their own future.
Fast forward 3 years.
Each business has grown. Larger turnover. Increased profit. Improved capital value.
Each business owner’s return from the business has grown.
More than anything, the stress levels have changed enormously. They were less. And there wasn’t the worry of being in a business relationship that you no longer wanted to be a part of.
A successful transition for two families – to a better, more profitable and happier future.CASE STUDY 1: PROFIT MAXIMISATION | CASE STUDY 3: TRANSITIONS