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Georgieanna and Brion Svenson Sr., owners of Four Star Limousines in Salisbury, N.H., are making sure that 20-year-old Brion Svenson Jr. works in every part of the company, observes and understands how and why business decisions are made, and most importantly, earns his respect before he some day runs the family business. Since the couple is in their 40s, they have no plans to retire soon, allowing plenty of time to cultivate their son’s leadership skills.
The All-American dream for many of us is to start our own successful business. We dream of one that will make us rich and provide well for future generations of our family.
For those who succeed and pass the business down through multiple generations, careful planning of the hand-off from one generation to the next must take place. While it may seem natural to hand it off to the oldest child when the time comes, the oldest child may not be the best choice or may not even want the business, says David K. Nicholas, a CPA with more than 30 years of experience specializing in emotional and financial issues of family owned and managed businesses. Nicholas is a registered representative of Transamerica Financial Advisors, Inc. and founder of Stewardship Advisors LLC. He has assisted multiple generations in succession planning and execution of equity transfers. Nicholas advises on financial investments, management and tax law matters.
The test drive
Before you bequeath the business in your mind to anyone, it might be a good idea to have them work in the business. The assumed heir to the throne just might decide against inheriting it after trying it out. Or you may discover the business philosophies of your offspring vary greatly from yours, and you want to preserve a certain management style or company image. Once the company is handed over, these philosophical differences can cause deep wounds that can destroy a family, Nicholas says. If you decide to bring your children into the business, they should learn all aspects of it. This will allow you to see the areas where they excel and where they may need additional guidance during the transition period.
All of our boys have worked in the business at various times in their lives. It allowed me to see who had what it might take if the business was ever handed down to them. It was an enlightening experience. We operate a valet parking service as an extension of the limousine business. Every kid worked in valet even before receiving a license. They were old enough to write the license plates on the claim-checks, catch doors for arriving guests, and begin learning the art of the luxury service industry. I quickly learned my oldest son was not the one. He was fine at driving cars but did not enjoy talking to people. He had no desire to be a leader. He just wanted to get the job done and then go home. This made for a great custodian of our building and grounds for many years.
The middle son always has a big grin and knew how to work that tip. He didn’t want to be a boss either, but it was evident that he wanted things run properly and by the book. He left and served his country for four years, and when he returned, he was even more “by-the-book” than ever. Today he is my trainer for all new chauffeurs.
The youngest son has all the personality of the middle one. He has the charm, the proper compliments at just the right time, and his little heart is burning to take over. He truly believes if things were done his way, the company would triple in size in a year. He has the zeal, but at the age of 27, he needs a few more years to calm down. I did, however, discover that he has excellent selling skills. His philosophy clearly differs from mine in closing a sale. I nearly fell out of my chair one day as he provided the phone number of a competitor to a client and told them they had the best deal in town. . . if they were looking for a budget-type limo. After describing the possible scenarios of using an older limo, I proudly watched him take the deposit. He could very well be the heir apparent.
Start them young
If you have clearly decided to pass on the business to your offspring, you might as well get them started in the business as soon as they are old enough to perform a job function. They just might be detailing cars before they are actually old enough to drive them. Brion and Georgeieanna Svenson of Salisbury, N.H. started Four Star Limousine in 1993. Their son, Brion Jr. was one year old. He is now 20 and poised to take over the business in the future and keep it going. Four Star operates a fleet of nine vehicles in the Massachusetts, New Hampshire and Maine regions with an emphasis on the Seacoast area. Brion and Georgieanna are in their 40s, so retirement is not on the horizon. The Svensons don’t have a firm plan in writing yet but realize the importance of having structure and are working on a written plan.
When the business was started, there was no plan to keep it in the family. It was simply a way to make a living for the short term. Nicholas has a firm belief that every business should be started with the intention of selling it. But, “it is the equity you build in the business over years of nurturing that makes it more valuable when the time comes to sell,” he says.
Speaking of nurturing, Brion Jr. is included in business discussions, although he does not actively participate in decisions. Brion Sr. believes it is important for him to learn the reasoning behind business decisions and learn why things are done a certain way. This provides a platform for decision making in the future. The growth plan includes learning to clean cars, dispatching, taking reservations, making schedules, and routing so he is thoroughly versed in all operations.
“I think earning respect is the first place he has to start,” Brion Sr. says about earning the company. “The ONLY way to understand what we do and why we do it is to do it himself. You can’t run a company if you can’t do everything necessary to run the company.”