On Monday September 18, 2017, Jack and I had the pleasure of joining Jim Blasingame again on his radio program, The Small Business Advocate Show, to chat about small business. We covered a couple of topics that are near and dear to our hearts and many small business owners:
– How do you fire relatives who are employees of your small business
– Tips and strategies to transition your small business to your kids or an outside buyer
Jim was surprised to hear that we recommend owners pay their relatives to stay away from the business. We have found that certain family members cause more harm by actually being involved in the business so it makes better sense to simply pay them to stay at home!
Another option to “fire” your relative is to make them quit so that it’s their idea. One way to accomplish this is to move them around to different roles within the business and if there isn’t a spot where they fit, they often come to their senses that they don’t belong and will elect to go elsewhere.
On the transitioning the business front we spoke with Jim about the importance of having a profitable company when it comes time to turn it over to your kids or another internal person. If you have profits then you’ll have some flexibility in terms of how you want to structure the deal and will likely enable the current owner to play the “bank” in the transaction.
One thing people need to realize with the sale of a small business is that maximizing the selling price usually isn’t the number one goal. More often the current owner wants to make sure that the right person takes over the business.