They had done it! The business was now finally in the capable hands of my father and his brother. I will never forget the newfound freedom that I felt when we moved, riding my bike or walking down the street totally unsupervised! We were now living in a much safer and very rural setting and friends in town were in short supply, so I would often make the one mile trek down to my Dad’s offices to hang out. My dad’s business became a second home for me and there was always a lot of activity, especially in the spring planting and fall harvest months. In hindsight, I am pretty sure I occupied my Dad’s business, not just out of boredom, but as way to be around him. He was working at a minimum 70 hour work weeks and I’m guessing he put up with my interruptions and distractions for that same reason.
One of my father’s larger challenges also happened to be one of my most vivid memories of the business. It was 1979…and if you’re of a certain age you’ll remember the Iranian oil crisis. It was only two years after my father had completed the purchase. An image very popular in the US at that time was materializing right in front of Kalona Oil – lines of cars, bumper to bumper down the street waiting for the chance to fill up – with my dad outside helping at the gas pump. This only lasted a short time, however, as they chose to close their retail pumps to help ensure no outages for their primary industrial and agricultural delivery customers.
My father proudly remembers that not one of their commercial accounts ever ran out of fuel. But this wasn’t without a herculean effort to see that this was the case. Dad’s days were totally consumed locating supply and dealing with poor quality fuel that created customer issues. Suppliers were, whether they knew it or not, passing along the bottom of the barrel sludge as they were emptying tanks to keep up with demand.
In my last post, I spoke about the perseverance demonstrated by my dad and his brother which had paid-off in the completion of the purchase of their business. It was this same resolve again that overcame the obstacle of the oil crisis during their still early tenure as owners. This grit isn’t unique among their contemporaries and I believe the trait lives within all tenured business owners. It shouldn’t be surprising that owners often feel invincible as their confidence to adapt and overcome is rooted in years, if not decades, of successes evidenced by their company’s sustainability and financial success.
Businesses are inherently risky and as such those that can navigate this risk and produce sustainable and successful businesses deserve to be financially rewarded. But too often the financial reward is delayed until owners monetize their ownership interest, either over time or in one event. As was the case with my father, most middle-market owners are only wealthy on paper as a majority of their net worth is trapped in one illiquid asset…their company. This realization was a turning point for me, and the reason that I chose to specialize in succession planning. I aim to help owners like my father protect and harvest their life’s work because I know and understand what goes in to it.
This wasn’t the only obstacle that my father faced, and I’ll talk more about the other key challenges and benefits he encountered both in his business and in being in business with family. Stay tuned…I hope you’re enjoying this story as much as I enjoy re-telling it!