Editor’s note: The ARA Foundation Rental Executive Advisory Program (REAP) has more than 30 REAP advisors on hand to help rental store owners and managers with advice and ideas for their business. The ARA Foundation facilitates the program, matching rental stores with an expert REAP advisor, who will communicate by phone, email or fax, or an in-person visit. In exchange for the REAP service, stores are asked to make a tax-deductible contribution of $50 per hour of counseling to the ARA Foundation. An on-site visit costs about $500, plus travel expenses. The program is open to anyone within the rental industry and can include topics from financial, operations and marketing to human resources and regulations. Below is an example of the type of questions advisors handle.
Q: We are looking at transitioning our family business to the younger generation. What advice can you offer?
REAP Advisor Brian Maginnis, retired American Rental Association (ARA) member and owner, Brian Maginnis and Associates, Long Beach, Calif.: The majority of rental centers are family businesses and an “exit strategy” in any business is very necessary and should be part of all business plans. The transition of the family business to the next generation should be planned in a systematic and purposeful manner. Today is the day to start this transition if you plan on removing yourself from the business next year or 10 years down the road. Preserve the family wealth with a planned transition from the founders of your business to the next generation. There are lots of advantages on transitioning your business to your “next generation,” so take advantage of every one of them.
Start by having a family meeting. If necessary, have a moderator and a well-planned agenda on the founder’s exit strategy. In most cases, you should have a neutral person who can guide the process and facilitate the transition. ARA has several available resources. Separate the family and business matters. All sides should be treated equally, and ideas and opinions should be allowed to be voiced during all meetings.
Founders of the company should express their feelings and intentions in a clear and precise manner. Most importantly, set realistic goals and expectations. The
next generation to lead the company — children of the founder or employees — should have patience with founders. Founders have done things mostly the same
way since starting in the business and know that change is necessary. Many don’t want to admit it and are unsure on where to start. Trust and respect is necessary throughout this process by both sides.
Treat this transition as any other business decision: Set expectations, guidelines and timelines; measure performance; be flexible; and, most of all, hold everyone accountable for every action. Your employees must perceive that the family members are worthy of the transition and constant attention to this will be needed.
For more information on the ARA Foundation REAP program, contact Jenni Venema, association programs manager/ARA Foundation director of development, at 800-334-2177, ext. 236, or email@example.com. For more information on the program, go to ARArental.org/ARAFoundation/RentalExecutiveAdvisoryProgramREAP.aspx.