After my talk at the last winter NAMM show, members from the audience came up to me for a friendly chat. Most had grey hair. A few were young. So you may think it’s odd why a 30 year old should be having to worry about a decision he or she may need to make decades into the future. Is this thinking correct? Absolutely!
As Joe Lacerda from Manchester Mill Music in New Hampshire says- Your business is always for sale.
In other words, build your business to sell it. If you were a buyer, would your music store be appealing to you if it couldn’t make money without the owner?
If you were a key manager, would you feel you were ready to own the store if you haven’t been trained properly? I’m mindful of Eric and Alyson Jay, the heirs and key managers to Stan Jay, deceased owner of Mandolin Brothers in N,Y a successful music store for over 40 years. His key managers (children) had to eventually close the business, in part, because of a lack of training. Here’s the link to my NAMM video where I interviewed Eric and Jay, and discussed the many challenges the family faced. The primary reason the business was worthless was the fact that the business couldn’t survive without the owner. Do you think Eric and Alyson or the owner were thinking about succession planning? Unfortunately no.
The subtitle of John Warrillow’s book, Built To Sell is “Creating a Business That Can Thrive Without You.”Unfortunately, according to John, most owners find that stepping out of the picture is extremly difficult because they’ve built a business that relies too heavily on their perosnal involvement. Without them, their company no matter how big or profitable- is esentially worthless.
As an owner, how do you define success? Is it how well the business is doing now under your ownership and the benefits it bestows you under you leadership, or by the rewards it can continue to offer when you are ready to exit.
At Winter NAMM 2017, I’m participating in a talk moderated by Alan Friedman, music retail accounting guru with Friedman, Kannenberg & Company, PC. The title of the talk- “But What if I Die?”- Succession Tips for Music Retailers.”
Here’s the description of the talk-
No matter how certain our futures appear, more certain is that our careers will end at some point. With that certainty in mind, succession planning should be an essential part of your business plan. Unfortunately, it’s easy to put off thinking about how to transiton your business, even though business struggles, an owner’s failing health, and the demise of a key manager can force that transiton. Right now (while you’re still alive), is the single best time to begin succession planning.
Think about succession planning, as the venue for a better work/ life balance- now and when you want to exit the business. Not when death, disability,or key manager departure forces you to.
Just remember, you know your business has real value when your music store can humm along without you.
If you will be attending winter NAMM, come say hello,weather you have gray hair or not.