Garreth Bohanes | Senior Consultant, Ecco Consultants
How long have you been working with family businesses?
eccoConsultants have been working with family businesses since inception in 2014. However, the founder of the company Frank Colli has been involved in multiple family businesses that he has started including an IT company that he started from scratch with 2 staff and grew it to an $280M business with over 330 staff across Australia and New Zealand. All our team here worked with Frank at the time. So, we have an intimate working knowledge of taking a family business to one of Australia’s largest IT companies.
What’s one of the most common mistakes you see in family businesses?
Well I am sure everyone has seen the statistics of fear and dread on surviving in businesses, i.e. 60% fail in the first 3 – 5 years, due to lack of strategic planning and execution, poor capital and cash flows etc. However, I think one of the biggest mistakes is NOT getting advice and this applies even more so for those 40% of families whose business have succeeded. Out of these surviving companies only 21% ever get sold for more than a dollar.
Why? Because every stage in a company’s development requires a new level of competency which either needs to be learnt or imported. Too many business owners are either trapped ‘IN’ the business and can’t see a way up, or feel they cannot afford to bring more experienced employees/managers, to help them take the next step. When we look at all the great success stories of people like, Bill Gates, Richard Branson for example both of whom went from startups to legends, even they got advice along the way. They weren’t people who knew how to run billion dollar global enterprises from day one. They learnt from others. Jack Welch (regarded as the greatest CEO of all time) included. He constantly surrounded himself with smarter people than himself.
The surprising truth about getting advice to help family businesses prosper and grow, isn’t that difficult or expensive. Done right you can do it without spending hundreds of thousands of dollars in salaries. Imagine being the owner(s) of a business, being supported by a Corporate Strategy expert and CEO mentor, external Corporate Financial Advisor whose been engaged by the four leading banks to help business’ get bank ‘sexy’, Sales Manager/Director providing leadership and coaching on sales effectiveness and efficiency, external HR/Human Capital leader helping find, nurture and keep the right people. This is what we call our virtual executive team.
Advice that will help businesses keep profitably growing to the next level and ensuring they become the RIGHT statistic – the ones who when they transition out of the business, hand over/sell a very successful one and reap the appropriate rewards. That’s essentially what we do, providing on going and active advice for arguably less than an average Managers salary!
What is your “uh ha” moment with your clients? When they realise ……
- Just working harder and longer in the business doesn’t fix the problems or make it more profitable.
- At the point that the owners realise they don’t have to have all the answers, what they do need to be able to do is have access to the answers, whether through staff or external advisors.
- Systemising your business costs money but saves you in the long term and increases the net value of the business.
- As every employee/manager needs to be accountable to someone, so does every owner.
- The point at which the owners stop putting themselves first and put their staff, clients and suppliers first and then find that this benefits them more than anyone else.
- At the point the owner’s realise they need access to a trusted, confidential, nonjudgmental and uncompromising sounding board. This becomes a major pressure release valve.
- That whether you like it or not one way or the other you are 100% guaranteed to exit the business. So, if you want to get the maximum sale return or hand it over to the next generation in the best possible condition, you better start planning for that TODAY!