Succession Planning – Part 1

Succession Planning  – Part 1

Introduction: Meeting the Challenges of Succession in the Family Firm

Start Looking at Succession Issues–Today!

Succession from one generation to another, or to qualified outside management, does not happen easily in the family-owned business (FOB). In this blog post ( Succession Planning – Part 1 ), we start a discussion on why succession planning is so hard and why it is so important.

 If you are interested in the succession and continuity of your business, you must understand that planning for that continuity is the critical factor.

 The failure to adequately address the topic of succession is the primary reason that only 30% of FOB’s continue into the second generation and that only 10% more continue into the third.

 Succession exists as an underlying issue in all FOB’s, playing a tremendously important role in the life of the family, as well as the life of the business. Yet owners and operators of family businesses rarely address succession, apparently because of its powerful psychological implications, which can sometimes be overwhelming.

Admittedly Succession Is A Complicated Topic

Thinking about and dealing with succession can be extremely demanding, both emotionally and intellectually. When you begin to examine the concept of succession, you must deal with aging, mortality, control, and power, just for starters. In addition, the business issues that founders must simultaneously deal with include ownership, management, strategic planning, and replacing the professional relationships from one generation with the next generation.

 These relationships include key non-family managers and advisors, clients, customers, suppliers, lawyers, accountants and bankers.

Succession Forces Business Owners to Make Hard Choices

When more than one member of the next generation is active in the management of the family firm, the senior members may feel they’re being forced to choose one child, for instance, over another. Most parents spend their lives trying to convince their kids that they are all loved equally, but in this situation, the founder and his or her spouse must make a decision that directly contradicts this message.


Rolling Ten Letter

Rolling Ten Letter

“Breakthroughs come from an instinctive judgment of what customers might want if they knew to think about it.” –Andrew Grove, Intel

Many people consider marketing to be promotion, advertising and all the selling techniques used to get someone to buy a product. However marketing is much more. The Rolling Ten Letter is a systematic way of marketing to specific marketing targets.

It’s important to understand that marketing is not the same thing as advertising, selling or promoting. Those are separate tasks. Advertising, selling and promoting are essentially the implementation of your marketing plan. That is, once you have identified your customer prospects and determined how best to reach and serve them, you then have to go out and make it happen.

A marketing approach to business begins with the customer’s needs and involves designing the entire business around fulfilling those needs through benefits.

One great need of small business managers is to understand and develop marketing programs for their products and services. Long term small business success depends on the ability to maintain a strong body of satisfied customers while continually increasing this body with new customers. Modern marketing programs build around the marketing concept, which directs managers to focus their efforts on identifying, satisfying, and following up the customer’s needs – all at a profit.

The Rolling 10 as a Marketing PROGRAM

What is the Rolling 10?

It is a systematic approach to contacting a specific number of prospects, during predetermined timeframes and to follow-up effectively.

The Rolling 10 is based on the fact that every prospect needs to be contacted at least 4-8 times to establish your name recognition and to possibly make a sale.

There are two ways to construct a rolling 10 program.

Option 1 –Letters/Marketing Pieces with Phone Follow-up

Step 1 – Identify best prospects for your product or service.

Step 2 – Compile or buy a list that includes complete company data including the decision makers name.

Step 3 – Write 3-4 letters or marketing pieces that stress the key BENEFITS that a prospect can expect to receive from doing business with you.

Step 4 – Determine time frames:

That you can comfortably support for sending out 10 letters to prospects.  A week is a timeframe that is most used.

That you can comfortably make phone follow-up.  A week between letters and follow-up is a time frame that is most used.

That you will use to send each consecutive letter.  4-6 weeks is a time frame commonly used.

Step 5 – Begin sending letters at the rate of 10 per week.

Step 6 – One week after sending first letters begin making phone calls to follow-up on these letters.

The process then becomes automatic.  Send ten letters and follow-up by phone on the letters that were sent the prior week.  You will have ten NEW phone calls to make every week to NEW prospects and follow-up phone calls to prospects who might roll-over for some reason from week to another.

Step 7 – Send additional 2nd, 3rd, and 4th letters or marketing pieces and repeat the follow-up process.

If you have contacted a prospect 4-8 times (a combination of letters and phone) and they have not responded or become a customer drop them from you list.

What is it you’re selling?

What is it you’re selling?

One of the struggles that entrepreneurs and many others seem to have is the answer to the simple question, “What is it you’re selling?”

In a major marketing text, McGraw-Hill Publications starts a chapter out with these telling words:

I don’t know who you are.
I don’t know your company.
I don’t know your company’s product.
I don’t know what your company stands for.
I don’t know your company’s customers.
I don’t know your company’s record.
I don’t know your company’s reputation.
Now–what was it you wanted to sell me?

The reality is that you are selling yourself first, followed by your service or product, followed by your company or organization.

As far as selling yourself, the cornerstone is that people must like you to purchase from you. It is very unlikely that, given the choice between buying from someone they like and someone they don’t, a buyer will select the person they don’t like. The key
is to get the buyer to like you, and that is done by finding out about them, as quickly as you can. Your buyers are just like you–complex, interesting, hardworking, personable and friendly. They are worth getting to know!

Harvey MacKay’s book “Swim With The Sharks Without Being Eaten Alive” provides some great examples of how an individual can overcome many perceived obstacles and learn a great deal about a potential or current customer. This book is an excellent
investment that you should make at any stage of your life.

The second area to tackle is to define the product that you are selling. It might be you, as a job seeker, a person wanting a promotion within an organization, a consultant selling services, or someone marketing a service or a product. Ask yourself this
question when defining your offering: What problem do I solve by providing this good or service? You may have to fine-tune your offering as you discover the various kinds of problems buyers are seeking to solve.

Focus on benefits when you sell. What benefit will you bring to the buyer when he or she has purchased your service, hired you, promoted you, or is using your product? In the competitive marketplace that we all operate in, you can no longer afford to
say, “Here I am, here is my offering, take it or leave it.”

A third method in this process of defining your offering is to take a somewhat more radical approach. Tony Robbins, the great motivator, understands that “we will do far more to avoid pain than we will to gain pleasure.” Give some thought to how your
offering will help the decision-maker to avoid pain. Do some simple research to determine what kind of pain your potential buyers have, and then work to clarify what you offer to remove the pain both now and in the future.

A third area to focus is on your personal reputation. This comes from having good work habits, dressing the part, returning telephone calls, being on time (if not early) and prepared for all meetings, being professional with all that you encounter, and by
going the extra mile for your customers, internal or external.

Each of us recognizes the reputation that large, well-known firms have. Take an organization that you respect and write down the specific things that you enjoy about that reputation. Ask yourself if there isn’t something that you can do to make your own firm a little more like the firm you admire. Is there a policy that they have that might be adopted by your company? Is the quality they have superior, and if so, what can you do to upgrade or change the quality that your organization provides?

It has been argued that one individual cannot change the reputation of a company. That argument is countered by the fact that when you are communicating with a customer, you are the company, and by acting as if that customer could solely decide your professional fate, you can change or maintain a reputation that an organization has based on how you deal with that customer.

Increasing sales has been determined in a national poll to be the number one concern of business managers and business owners all across America. Knocking on doors or making telephone calls may get you an appointment, but as you can see, there is a lot
more to answering “What is it you’re selling?” How ready are you to answer the eight statements made at the beginning of this article?

What you can do for Market Research

What you can do for Market Research?

Marketing research is limited only by your imagination. Much of it you can do with very little cost except your time and mental effort. Don’t forget that many governments – local, state, and federal – have on line data bases like the census that can be targeted for your specific industry and location. Here are a few examples of techniques small business owner-managers have used to gather information about their customers. What you can do for Market Research – with the interenet and help from local Colleges just about anything you want/need when it comes to marketing research.


License plate analysis

In many states license plates give you information about where a car’s owner lives. You can generally get information from state agencies on how to extract this information from license numbers. By taking down the numbers of cars parked in your location you can estimate your trading area. Knowing where your customers live can help you aim your advertising for good effect. Or, how about tracing your competitors’ customers using the same approach to win them for your business.


Telephone number analysis

Like license numbers, telephone numbers can tell you the areas in which people live. You can get customers’ telephone numbers on sales slips, from checks and credit slips, and the like. As noted before, knowing where your customers live can give you an excellent idea of the way they live and what they are like.


Coded coupons and “tell them Joe sent you” broadcast ads

You can check the relative effectiveness of your advertising media by coding coupons and by including phrases customers must use to get a discount on some sale item in your broadcast ads. This technique may also reveal what areas your customers are drawn from. Where they read or heard about the discount offered in your ads will also give you information about their tastes.


People watching

You can learn a great deal about your customers just by looking at them. How they dressed? How old do they appear to be? Are they married? Do they have children with them? This technique is obvious and most owner-managers get their feel for their clientele just this way. But how about running a tally sheet for a week keeping track of what you’re able to tell about your customers from simple outward clues? It might just confirm what you’ve thought obvious all the time, but it might also be instructive.


Customer Survey

If you are a business owner, these questions are for you. Have you conducted your own private interview of customers? Have you personally talked to at least 50 to 60 customers to find out what they like or dislike about your business, products and service?


A personalized business survey is a simple thing to prepare and implement. If you do it regularly, you can find when and where things are breaking down in your service.


Use a piece of 8.5 x 11 inch paper with the following types of yes and no questions:


1. Is the service we provide meeting your highest expectations? If not, what areas can we  improve?                               

yes _____  no _____


1. ________________________

2. ________________________

3. ________________________


2. Are we providing the brands and lines you want and expect? If not, please list what is needed.        


yes _____  no _____


1. ________________________

2. ________________________

3. ________________________


3. Is our business clean and pleasant to be in at all times? How can we improve it?


yes _____  no _____


1. ________________________

2. ________________________

3. ________________________


4. Do you feel the business is truly a part of the community? yes _____  no _____


5. Is it a friendly place? yes _____  no _____


6. Are the prices competitive? yes _____  no _____


7. Do you feel you are getting good values? yes _____  no _____


You may want to include more specific questions, but the key is to keep the survey short and to the point. Keep it personal by preparing and signing it yourself. Leave room for written comments.


Questionnaires should not be stacked at the cash register for casual distribution. Personally present them to customers along with a self-addressed, stamped envelope.


What can you learn from this? Plenty. What can customers learn? Well, it shows you care and that is always a sales plus.


Do, Don’t Overdo

The key to effective marketing research is neither technique nor data – it’s useful information. That information must be timely; your customers’ likes and dislikes are shifting constantly. You’ll never know everything about a particular problem anyway. It’s much better to get there on time with a little, than too late with a lot. If you spend too much time gathering too much data going for a sure thing, you may find your marketing research is nothing but garbage.