Make the decision to exit your company on your own terms.
I am 63 years old and have recently retired from my material handling business. The thought of retirement had been on my mind for many years; however, not solely because I wanted to retire. I am a third-generation successor in a material handling company that was started in 1911 by my great uncle, Richard Hazen Brown (R. H. Brown). I started my career in 1965 and eventually succeeded my father, Stanley E. Larsen. I came to realize over a period of time that the welfare and longevity of a business had many requirements, most important, a plan for succession.
I have had the pleasure and privilege to foster many long-term relationships with vendors and peers in the material handling and other industries both domestic and foreign. The majority of these businesses are closely held, some within families and others in partnerships. All of these businesses have one thing in common: the issue of succession. My eyes were opened long ago to the value of a structured succession plan from all our peers within MHEDA and from key vendors. I came to the conclusion that a closely held business has few choices in the matter of succession: sell to employees, sell to an outside buyer, pass on to family or shut the doors. Whatever the choice, I felt controlling the process of succession was most important for the business, my family and myself.
Although a long-term commitment, my succession experience was brief. I was an inside salesman one day and a vice president the next. My father and I were opposites; however, the blend of personalities worked. When he wanted “out,” I was given a great opportunity. In three short years, through a turn of events, I assumed the role of president and purchased the business.
My wife Carol and I have two sons. Our oldest son is Brad, who has a career in industrial design. He is the creative, artistic one in the family. Our youngest son, Scott, aspired to a business degree. Our plans for the business succession and our retirement were not clear for a long time. We have been to many MHEDA-sponsored succession and estate planning seminars. The knowledge gained from the seminars inspired us to engage a friend and consultant to discuss succession plans. His experience was advising closely held businesses in all aspects of succession. His advice for me was profoundly simple, with four distinct benchmarks:
- The Principal must make up his or her mind to “let go.”
- The Principal and the Successor must be compatible.
- The Successor must be competent.
- The Succession Plan must be in place by the time the Successor is 35 years old.
Letting go was a tough decision. The decision had many ramifications, not the least of which were concerns for the business, my family and my own brain cells. The thought of leaving the industry was sad for both Carol and me, especially knowing we will miss the annual MHEDA Convention, our vendors’ meetings and other industry events, and mostly the friendships we’ve made over the years. (Don’t be surprised if we show up on a few doorsteps during our retirement travels!)
Eventually my decision was made. The successor to the business was our son Scott. Not only was he chosen, he also had to choose. Did he want to be in the material handling industry? Work with his father? Ultimately be responsible for all aspects of a business? Could he manage the commitment to purchase the business? He has since proven to himself, customers, vendors and employees that he has what it takes to be a fourth-generation successor to a business in the material handling industry. The successor to R. H. Brown Co. began his career at the age of 26. The R. H. Brown Co. is fortunate to be in competent hands.
Letting go is a big decision and an emotional one. One way or another, a simple thought or event will motivate the decision. Make the decision to leave your material handling business on your terms.
Death occurs when no one is committed to the organization anymore.