Pub. 3 2013 Issue 2

20 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com O ne of the greatest benefits of a family-owned business is the ability to create a legacy that can pass from one gen- eration to the next. A business-owning family can create many opportunities for their children and grandchildren that are not available with many other careers. However, a real challenge is created in structuring control as the dealer passes the torch to the next generation, especially when multiple children and/or other family members try to lead the business into the next generation. The matter is even further complicated by the manufacturers. All dealers are familiar with the manufacturer require- ment of a single person being in charge. The Dealer Prin- cipal has ultimate control and responsibility for the success of the dealership. Additionally, the manufacturer wants a General Manager on site with complete control of day- to-day operations. So how do you decide among children, cousins, and “outlaws” in the business who should be in charge? Of course, if you own multiple dealerships you can solve this problem by assigning each individual to a differ- ent location. In many cases, however, this creates more problems than it solves. When sales results impact the child’s pay-plan, they become reluctant to share resources and allocation of expenses among dealerships. The result is not a “one-for-all and always put the business first” at- titude. Instead, it creates turf wars among the heirs. So how do you resolve the problem? How can you foster an environment where everyone is on the same team pull- ing for a common goal? The solution is creating a Family Board. With a Family Board, no one family member has to have majority control. But wait a minute; no manufac- turer will go along with this idea, right? Wrong. Even Toyota, a manufacturer known for its stringent require- ments, is on board with the concept as long as you follow certain guidelines. The Family Board offers many advantages to the fam- ily business. First, it provides a forum where all family members, both active and non-active in the business, have a “voice” in the company’s future. When all family mem- bers are allowed to contribute to the company vision, it fosters harmony within the family. Many spouses complain about the discord that the business brings to the family and recognize the need for a forum in which to address issues of concern. The Board provides the dealer with a setting The Family Board in a Family-Owned Business BY ROY DIXON