Contractors Need to Plan an Exit Strategy
I recently traveled to Houston to do a story on the change in leadership at Goodman. The company named Takeshi Ebisu president and CEO, while the former leader of the company — Dave Swift — is taking an advisory role with the company and beginning a consulting career.
I must admit, I was a bit skeptical of how this meeting was going to go. It had been fewer than two years since Daikin had bought Goodman, and now, the former executive vice president of Daikin was taking the reins. I thought, perhaps this was not a friendly transfer of power. I was worried the interview with Swift and Ebisu would be the most awkward threesome since … well, this is a family publication so I better not finish that sentence.
But, that was not the case at all. Swift, one of the really good guys in this industry, looked relaxed and content. Maybe they pulled the wool over my eyes, but it appeared to be a mutual decision, rather than the forcing out of the old regime. Both seemed genuinely excited about the future.
One item Swift said did resonate with me.
“I have always thought that a good time to move on is when I had done enough and the company was positioned better than when I arrived. And I do think we are at a much better spot,” he said. “We just concluded an excellent fiscal year, which will serve as a solid foundation for Goodman’s future success. I feel we have made great progress in terms of integrating Goodman into Daikin and, likewise, taking some things from Daikin and bringing them to Goodman.”
What Is Your Plan
Not everyone is lucky enough to ride out into the sunset on top. Think Brett Favre. The most important piece is to make sure you have prepared your business for your departure by the time it arrives. And, like anything else in life, these moments tend to arrive quicker than you imagine. I assume having a business is like having a kid: the days are long, but the years are short.
Do you have a succession plan that will run as smoothly as Goodman’s when you hang it up? That could mean anything from selling the company to an outsider or passing along the business to your children. The obvious truth is that you need a plan because it will eventually happen to everyone.
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This has been getting some attention recently in the industry. Warren Hudson of L.C. Anderson presented on this topic at a recent ACCA meeting, and the Heating, Air-conditioning, Refrigeration Distributors International (HARDI) debuted an Emerging Leaders program to help some of their family-owned companies prepare the younger generation to take the next step in becoming executives.
If you are keeping it in the family, it is a good idea to make sure the next generation has put in some time working and learning the business. A few people I have spoken with were told to hold a job outside the company for a few years. They believed this work out in the real world helped prepare them for taking over the family business.
As an owner, you must decide whether you are giving your kids the family business or selling it to them. If it is the former, would you be interested in adopting a 36-year-old slightly overweight son from Metro Detroit? If it is the latter, you need to find out what the company is worth and decide whether you want to go directly to the golf course or spend some time helping out and drawing a nice salary.
If you are selling the business to a competitor, or a third-party investor, the financial legwork gets even more difficult. That is beyond my knowledge, but I would suggest you hire a professional.
Whichever path you choose, this is not something that can happen overnight. It is never too early to begin formulating a plan.
Good luck to you in organizing your affairs, and good luck to Swift in his post-Goodman life.
Publication date: 5/19/2014
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