I am mostly writing this to vent about a situation I put myself into with a family business. I am open to any suggestions or advice on changes in focus or attitude.
Background: About 14 months ago, I quit an engineering job in the Midwest to return home to a western state to take over an equipment dealership that my dad has run for 30+ years. I came back because my parents are aging, to be closer to other family, and because home is home. The dealership had been my in with the company six years ago when they hired me. My dad had run the business, along with a cattle ranch, by himself except for summer help.
It had started as a side business and was never treated as a full-time focus, though it certainly could take up every waking hour. Except for starting to use QuickBooks for accounting and inventory, very little has changed with how he ran it since the beginning, including investments in shop space (shop also used for work on ranch equipment), parts storage (old, dirty, inadequate sheds), or office space (converted bedroom in my parents' house).
The reason no growth occurred was, I presume, it could not be afforded. As a sole proprietor, he never paid himself a regular wage, instead just "making a draw" whenever he needed funds. When I came back, the issue of me taking a regular wage took him considerable thought, and I am paid as contract labor.
From June 2016 through December 2016, I handled only service work (shop work and service calls to customers), parts deliveries, and some sales. In January 2017, I took over most of the paperwork, invoicing, pricing, ordering, and sales. He has been fine with this change, and seemed to welcome the load off his mind and back.
Our primary vendor has requirements for dedicated shop space and a store front, neither of which are met by the current setup. My dad is grandfathered in with his current arrangement, but when I am officially in charge, changes to facilities will need to take place. I would welcome the change, because our current arrangement is very crude, inefficient, and not businesslike; the best place I have to negotiate the sale of a $40,000 piece of equipment is an untidy kitchen in my parents' house. I cringe every day that this is how I represent myself and our business to the public. All of our competitors are larger and more polished than we are. The hangup is cost.
Virtually every aspect of the business needs modernizing: shop space with lifting devices and tools, a suitably capable service truck, office space, storefront with parts and equipment displays, and parts warehousing. Without real estate, I would estimate buildings to cost about $250k, and a truck to cost about $55k. I probably have another three years at most before I am forced to a go/no-go decision on new facilities.
Despite being in business this long, there are zero cash reserves. On paper, it was a profitable business, but there is little to show for it. I recall few years when my dad was NOT scrambling to cover the cost of goods sold, but this has not been the case this year. In the seven months I have been in charge of the paper end of things, the financial situation is healthier. I have had average sales, but plan better, I make the effort to pencil things out, and I document what I am doing.
As for the experience of the work, it has not been my favorite. I am competent in the shop, but much of that work is not enjoyable to me, especially in a cramped, dirty shop. Sales work can be fun when people say yes, but that obviously does not happen every time. Many parts sales happen because their machine is down and they’re upset about it. I'd say I go home angry or frustrated three or four days a week. Summer is our busy season and today was my first day off in two weeks. Winters are much slower, and I used last winter to get a handle on QB, inventory, and other administrative items.
My dad and I do not have the best dynamic. We argue often, and I get frustrated that he is a poor planner, does not budget his time well, and is extraordinarily forgetful. Professionalism is completely lost on him. His saving grace with his customers has been his attitude being more like a neighbor wanting to help a neighbor, and going any length to do so. Customers have told me that he had forgotten to bill them in previous years, sometimes for thousands of dollars-worth of goods or services. I do not allow this.
On the other hand, he gets frustrated with me for questioning him, I presume because of an old bull, young bull situation. He's done it this way for this long, how dare I challenge him? My original goal had been to grow this business enough to employ one person for office work and one or two for shop and field service work while I ran the ranch. This hinged on my dad being healthy and capable enough to run the ranch by himself in the meantime. My other family members and I see noticeable slippage in his abilities even year to year, so this may not be a reasonable goal. I am not interested in single-handedly running the ranch and running this business like he has because everything would be half-assed and I would be miserable.
My family members are very aware of my dad's "quirks" and are supportive of me. On paper, the business makes money, but I am very hesitant to find that much financing for an endeavor that I do not enjoy much. I love the company that we sell for, have a good relationship with the regional representative and with many of the people at headquarters. After growing up in the business and then engineering for the vendor, I have considerable history of the many kinds of equipment we sell and service, more so than many of our competitors, and feel I have some credibility.
What is a reasonable amount of time to feel out a business before pulling the plug or taking a big plunge? My gut tells me I need to think of supporting my family, building our future, and protecting my sanity with a more reliable, less stressful career. On the other hand, I feel this business my dad has run for so long deserves at least a fair go to see if it might just be the unpolished gem my naïve self thought it to be a couple years ago.