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Sold business for several $million - now a family business?

Discussion in 'The Unscripted Entrepreneurial Mind' started by Scott Fleming, Feb 8, 2019.

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  1. Scott Fleming
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    Scott Fleming Contributor

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    Hello Community,

    I recently sold my Amazon business for several $million after 3.5yrs of non-stop extremely hard work and commitment. Everything is possible, but it's not easy!

    My 3 children (16, 18, 20) all want to follow in my footsteps. Difficulty I am having right now is how to direct them - if they should join the scripted and get a job short term, while they work on the entrepreneurial dream on the sidelines. Difficult as they need an income and they need to learn and experience some of the crappy scripted dogma crap before they can really appreciate and get that FTE experience so they can begin their journey. Starting a family business is one option, but it's selecting the right one. Still some time to think it through I guess...

    In the mean time, I have bought them both books to read to begin their true education process :)

    Looking forward to being part of this community

    Scott
     
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    D.Gintz Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Congratulations.
     

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    Congratulations Scott!

    Acknowledge early the dynamics of locking family and business together, and make sure everybody understands and agrees with each other’s expectations. It will put stress on your relationships and create issues down the road if the relationships and work ethic aren’t strong enough from all parties.

    I hope to see the progress of whatever you decide, very cool.
     
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  4. Andy Black
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    Andy Black Any colour, as long as it's red. Staff Member Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Congrats.

    @ZCP ... how’s it going with your kids and their business?
     
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  5. Scott Fleming
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    Only sold mine (completely - as in finished training and got final payment) 2 weeks ago. 20yr old has the starting of a new Instagram business, 18 year old has a job just now and the 16yr old still at school
     
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    First, congrats! That's an awesome milestone.

    Second, I would warn against a family business.

    My wife works in an orthopedic surgeon's office. On the outside, it is one of the most prestigious doctors offices in our area. Every day it looks like black friday doorbusters. Seriously. He sees more than 80 patients on clinic days, more than the other 5 doctors combined. And conducts 14 surgeries on Tuesdays and Thursdays. The dude is a machine, and one of the best. He HAS and CONTINUES to build one of the most highly regarded offices in the region.

    Here's where he messed up. Upon divorce proceedings, he brought in his girlfriend to assume the position of office manager. She's good looking, probably a former stripper(rumored, not confirmed), and terrible at business. Every time there's an employee that leaves, she brings in a family member. There are now no less than a DOZEN people who are closely tied to this woman, by either blood or friendship.

    Most of these "employees," are actually bad at their jobs, and have zero punishment from their protected status. Because of this lack of firing for lack of proficiency, the clinic is toxic. The problem, is that when these people are actually BAD at their job, there is no recourse. No one fires their brother, best friend, aunt, or cousin. And the outsiders all notice. Because the outsiders suffer from working in close proximity to these ... substandard employees. Hiring family is easy, but firing family extends beyond the professional paycheck. Say goodbye to your holiday cheer, your dinners, and other functions.

    I hate to have painted this picture in your somewhat celebratory thread, but I would STRONGLY suggest that you support each of your children to build their own separate business. They will be able to support each other if needed, while being able to maintain wholesome relationships outside of the workplace.
     
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    I've experienced two family biz as a non-fam member. One sucked hugely. Family members not doing their jobs, get paid way more, etc. The other was great. In fact, the son was better at the biz than his dad who started it. The difference was that the son had to work his way up from the bottom. He started while still in school sweeping, mopping and cleaning the crappers. When he was old enough, he started loading the trucks, then driving, then managing the yard, etc. Everyone knew he had earned his place.
     
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  8. MJ DeMarco
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    Wow, almost missed this thread.

    Big congratulations on the big sale!

    Generally I would avoid mixing family with business.

    I'd be supportive, but not entangled.

    Thank you for that, means a ton to me!
     
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    My immediate thought is that each kid should start their own business. Mentoring them will probably accelerate their progress. This is just the model I have for "family business" I guess.

    My family is like this... Mom, Dad, Granddad(s), Uncle, Sister, Brother in Law, all have/had a business. Most of the time we're just friendly bystanders to each other's businesses. And maybe nobody charges Mom for the products ;) (unless Mom insists, in which case all shall obey). I think that's a good model though.

    We all tend to develop different ideas about the direction, the culture, the best way to run things, etc. That could get really stressful if you have two members of the family trying to run parts of the same business at the same time. Succession is another story, because control is passed from one to the other... you still only have one person making the decisions, and that's a lot less stressful.
     
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    Incredible job - this is inspiring!
     
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    This is how I’d like to do it with my sons. Everyone sets up wee businesses and all support and help each other out.
     
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    Very inspiring @Scott Fleming

    Love reading stories like this.

    My son is only 5 but I am already asking him what kind of business he wants to own.

    It's usually a Power Ranger or Dinosaur business... But hey I am planting the seed young!
     
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    I would include reminding the kids that the first business venture isn't usually the "home run" business that makes it big. It might be the 2nd, 3rd, or whatever business that ends up being the big, scalable money maker.

    Also, make them get a shitty job. That way they understand what its like to be an employee. If they can get something where they are working beside someone twice their age then that might help, too. They might think "man, I don't want to be like this guy working next to me in 20 years" and be more motivated to work hard. It sounds arrogant when I'm saying that out-loud but it's the truth. I worked a lot of shit jobs and it helped me a) realize that being an employee sucks and b) realize what I didn't want to do as much as focusing on what I wanted to do.
     
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    Congratulations! People like @JasonR and others here have also sold Amazon businesses and shared their stories on how they sold them.

    But every deal is different and exits and business sales never get old, so if you feel like sharing how your sale went down in a separate thread, I'm sure the forum would love to hear it!
     
  16. Scott Fleming
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    Thanks MJ - I am already experiencing a level of "expectation" from my kids and handouts will give them nothing in real life experience. I am actively encouraging and acting as a mentor - they are still young (16,18,20) so have time. My eldest was part of the business so he has some insight already how challenging it is being a small business owner. I am using your advice setting up my Money System just now, then second half of the year I am looking to start a new business (it's a lofty goal of £100m exit value potential - right now I don't have the idea, but thats fine as the money system if my most important immediate goal). If I get my £7000/mth passive income, the next business will be fun as I am already FREE. Both of your books are beyond awesome - its better than an entire MBA in a relatively short book! Absolutely amazing and I have recommended to many of my friends and family (so yes, you obviously have an incredible productocracy selling itself - just like my professional kitchen knives used to do...)
     
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  17. Scott Fleming
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    My youngest did online arbitrage at 14yrs old - until Amazon discovered his age. He has a car washing business but the best part is he has a couple of his mates doing the work and he did a 50/50 profit split with them haha :)
     
  18. Scott Fleming
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    My kids issue is they seen what i achieved (i'm 45 with a lot of experience). I agree, they need a job and to set up a business on the side and once they find one that takes off, then can then sack the job
     
  19. Scott Fleming
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    Agree fully
     
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  20. Scott Fleming
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    thank you :)
     
  21. Scott Fleming
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    Eldest is doing some drop shipping. Middle one is pursuing a business that does not meet the CENTS framework so I am sure he will reassess when he gets that (gardening business). Youngest is due to finish school exams in June, then he will be all over it (he has already read and understands both books - so has his MBA_MJ style before even leaving school). He has a small car washing business on the side and has tried a few other ventures from the age of 14......he is very keen to add value to the world and make money in the process :)
     
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    Congratulations on your success. I wouldn’t mix business with family. Just mentor them, and let them learn on their own.. i have a friend who is working with me part time, he is 75 years old, very nice man, and he was an enterprnure, and business man, long story short his son made him lose everything, and left him alone.. I promised myself when I become rich I will help this old man to retire because he doesn’t really deserve this.. matter fact he works a lot better than a lot of the young people I hired.
     
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    My eldest worked in my business and him pushing for massive product growth cost me $2m (I was offered $5.5m but as the new products were all launching at the same time, the advertising costs turned the TTM net profits from growth to decline and that buyer pulled out). We launched 66 SKU's in 6 months. The multiple was hit when the business TTM started to decline (even though it would rise again once the products matured). It was my decision to grow at that pace, but I did take influence so a lesson for next time around :)

    I could have stalled the sale, but with Trumps importation duties, the states potentially coming after sellers to claim sales tax, the supplier hiking prices and Amazon setting up a 3rd SBU as Amazon Advertising (meaning more competition and higher ACoS) I reasoned it was a must to exit to give me the security I needed. Business is now reaping the benefits now the products are maturing... But, I am now FREE so the ultimate goal was achieved :)

    Using MJs CENTS framework, I am really looking forward to digging into my next venture 2nd half of the year
     
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    I learned this the hard way too. Not 2M, but maybe 100k or so. There's lots of little things I would've done differently in the last 6 months of owning that business.

    You really have to know at least 12 months in advance of a sale that you're going to sell, and optimize that TTM accordingly.


    You could've done it differently, but nothing beats cash in the bank!


    Excited for your kids... they've got a great example. My 2 and 4 year olds love coming to the warehouse to hang out, and making a mess! I let them put labels on shipments and write on the whiteboard. I can't wait for the day that they can help me out more!
     
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