Scott Bailey and InTheBlack – Ink Co
Scott Bailey: “Yes, I liked too. I named it In The Black-Ink Company because I help people stay cash flowing in the black, versus in the red. I provide part time CFO work, I do some coaching and exit plan usage.”
Norman A. Hood: “You were a speaker here today, right, at one of the sessions?”
Scott Bailey: “Yes, I was.”
Norman A. Hood: “What’d you talk about?”
Scott Bailey: “Successor selection.”
Norman A. Hood: “How’s the business owner go about that?”
Scott Bailey: “Well, often in family business, they are trying to pick a family member or a key employee. Sometimes they look on the outside, but most often, unless they look on the outside, they’re really not looking at qualifications of the candidate. They’re assuming, look, you’re related to me and I just want you to have it, but failing to look at how well prepared they are to take that seat is to fail the hope and prepare to be well on that seat.”
Norman A. Hood: “What do you think is the biggest problem that comes up when you get into that process with the client? What’s the biggest problem you use to see?”
Scott Bailey: “Well, first is to understand where the company is going next. Do they have a strategic plan? If they’re looking out a couple of years or anything between five to ten years, the skill set going forward is likely different from the skill set behind them, so that would dictate a different type of success or fail. So, looking at that it’s important if an advisor is trying to help with successor selection because the key owner has not done that. They really need to know who gets to decide, is it just the owner or is there a spouse or another key family member, is there a key employee– so, understanding who gets the say. Those are the two pitfalls necessarily helpful to avoid.”
Norman A. Hood: “Let’s just take a case of the business-active child, what are some of the biggest challenges when working with, making them successor of a business?”
Scott Bailey: “Well, one might be if it’s the founder who is still running it ready handoff to just to the next generation, that they’ve already incurred all the bumps and bruises and had taken the risks and failed in one, got back up. They might be a little bit too punishing on the next generation, so not be involved to stuck on and giving them some space to succeed or fail. So, if they are reluctant to even leave and focus on micro-managing the next generation leader, then what I like to do is get the owner, operator the founder focused on what’s life going to be like after you’re out of here? If it’s that more attractive to you than what you’re doing now and if there is something that is pointing at that direction, it could tone down the criticism and get them to actually work on, okay, ‘How can I get out of here and what’s going to be a workable plan’?”
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