Business Longevity: How long will your business live?
Originally broadcast on Startup Nation Radio, WJR, November 2014:
So you just started your business. Maybe you had your first anniversary and that first year flew by or was the toughest year of your life. Either way, imagine your company being around for another 99 years. Our guests today, Andy Shmina from A.Z Shmina Construction and Brett Schneider from Madison Electric, are both CEOs of their century old family owned businesses. Andy and Brett shared with us how their companies survived all the economic twists and turns over the past century and what you need to do today to ensure the longevity of your company.
Co-host Norm Pappas shared his insight on the importance of developing your succession plan today, well in advance of when you’ll be implementing it. We know that one of the main reasons people start a business is to leave something for their kids to eventually own and operate. If that is part of your dream, what are you doing today to plan for a future for them as part of the family business?
Brett and Andy both said that the family business is basically in their DNA. As Andy eloquently stated during the show, “You don’t find the business, the business finds you. My dad always wanted me to someday run the family business, but after college I felt I might want to strike out on my own and went to work for a large mega-corp. Well, that lasted only a short while until I realized that my heart is with the family business, and that’s where I wanted to focus.”
Obviously to get to the next generation, you must get though the first generation. Brett and Andy shared their secrets to longevity, including the importance of earning the employees trust and confidence by rolling up their sleeves and doing the hard work, earning special educational degrees to bring new ideas and thinking to the company, and to focus on their existing customer base and their employees as key factors leading to a long and rewarding future.
Hear more on the secrets to a business’s longevity right here on StartupNation
(To listen to the show use the audio player at the top of the page)
“The bottom line is….if you want a company that will be around for a hundred years or more, here are the key focuses you must attend to now and always as you operate your company:
1. Focus first on shoring up your existing customer base. In keeping with the theme that your best customer is an existing customer, there is nothing better to ensure longevity than to have a customer base that comes back time and time again to do business with you. This provides a baseline of consistent revenues and the cost per acquisition to acquire business from existing customers is substantially lower than for new customers.
2. Focus on keeping employees long-term. Happy employees that take pride in the company will produce better for the company, and will even become company ambassadors. Many employees are the actual touchpoint between the customer and the company, and the more pride the employee takes in their job and the company, the more business you’ll do.
3. Keep innovating. The greatest threats today in the form of competition come from the unlikely small upstart companies because they can be the biggest disruptors in an industry due to their ability to be nimble and to think and execute in innovative ways. It’s easy to get complacent but don’t let it happen, ongoing innovation is key to long-term survival for a company.
4. To be a good leader, demonstrate that you are a team player – willing to roll up your sleeves and work alongside the employees from top to bottom. Demonstrate that you are willing to do the hard work that you are asking your team to do, and you’ll earn their respect.
5. As a leader, bring new ideas and credentials to the business. Getting educational degrees brings fresh thinking and discipline to the company that it wouldn’t otherwise have without the transition to new leadership and without that new leadership getting a progressive education. Formal education, mixed with on the job experience, mixed with a desire to roll up your sleeves and do the hands on work of the company are ingredients that collectively make for effective leadership.
6. Last, don’t let the work get stale. Ambition for further growth, and even a little fear of failure can be great drivers to ensure that the company which has been around for 100 years already has a chance to make it for another 100 years.
7. Keep up the hard work, think about your succession plan, and continue to build the key core relationships – employees and customers – to ensure that your business is around for a century and beyond. As Brett said, “today is day 1 of the next 100 years”.