Need a Little Input from Some Fellow Professionals

[TylerP]

Hey guys and gals,

I am a property and casualty agent located in Kansas City, MO. I've had my Independent Agency for a little over a year now (exactly a year as of October). I've had some success building my book of business but wouldn't define it as hitting it out of the park. It's definitely something that, given a lot of hard work and effort, could end up being a fine business in the next five years. With that being said, my post will shed some light on my current situation.

My father owns a trucking company (we have a freight brokerage, a fleet of about 20 trucks that we do LTL and TL local runs throughout the Midwest and we own warehouses throughout the metro with a combined floor space of about 500,000 sq ft) and we've had this business in our family for nearly 20 years. I will be 28 in the next few months and my dad recently battled cancer (successfully as of now; no traces of it thank god) and he now has really been pushing me to learn our business. My whole life, I have been unclear as to whether or not he wanted a legacy company but since I have graduated college, worked for State Farm for sometime and finally started my own Independent Agency, it seems my dad is now ready for me to work with him. I know he wanted me to "pay my dues", so to speak, and I have done that.

With all of that, do you think it would be foolish of me not to pursue a company that is already well established? I enjoy insurance but I don't enjoy it any more than I do logistics. The pride in me wants to establish my own business but the rational and more logical side says grow the business that's already well on its way.

I guess what I am asking is, what would you guys do if you were in a similar situation?

No right or wrong answers, obviously. I am just curious to how people would perceive the situation if they were in it themselves.

 

[Winter_123]

Hey guys and gals,

I am a property and casualty agent located in Kansas City, MO. I've had my Independent Agency for a little over a year now (exactly a year as of October). I've had some success building my book of business but wouldn't define it as hitting it out of the park. It's definitely something that, given a lot of hard work and effort, could end up being a fine business in the next five years. With that being said, my post will shed some light on my current situation.

My father owns a trucking company (we have a freight brokerage, a fleet of about 20 trucks that we do LTL and TL local runs throughout the Midwest and we own warehouses throughout the metro with a combined floor space of about 500,000 sq ft) and we've had this business in our family for nearly 20 years. I will be 28 in the next few months and my dad recently battled cancer (successfully as of now; no traces of it thank god) and he now has really been pushing me to learn our business. My whole life, I have been unclear as to whether or not he wanted a legacy company but since I have graduated college, worked for State Farm for sometime and finally started my own Independent Agency, it seems my dad is now ready for me to work with him. I know he wanted me to "pay my dues", so to speak, and I have done that.

With all of that, do you think it would be foolish of me not to pursue a company that is already well established? I enjoy insurance but I don't enjoy it any more than I do logistics. The pride in me wants to establish my own business but the rational and more logical side says grow the business that's already well on its way.

I guess what I am asking is, what would you guys do if you were in a similar situation?

No right or wrong answers, obviously. I am just curious to how people would perceive the situation if they were in it themselves.

I would need to see how serious a businessman your father is. "Pushing you to learn the business" sounds good but what does it mean in reality. You get to jump through hoops and hope you get the bigger pie in the longer run if you are good? Rather than a legally enforceable succesion plan that ensures that you are not going to just be left with mess and everything flucked up in probate trying to prove what dad "wanted."

If you are giving up something then dad needs to offer you a pathway where you get compensated. I would need to see something like a percentage of ownership passing to you each year you are there or an agreed upon severance plan where the dollars work for you. And I would need to see what his estate and business planning looks like a far as having done the legal homework.

Then it would get my attention bigtime. Dad needs to understnd that you are businessman now, not just a kid hoping for some crumbs if you are good boy. If he has you in mind for succession planning, he needs to treat that seriously or go find someone else. Just as you will be treating the opportunity seriously.

Note that I am not saying that he has to decide to have you as his successor before he is ready to do that and learned more about you on the job. Rather, I am saying that there is a cost to you going there and if he is serious there needs to be an understanding of what your severance would look like if you do not go into the next phase where equity in the company starts to build.

Of course, my response would be different if you said you hated your current venture and just wanted out. In that case you would have nothing to lose by just giving the freight business a try.

 

[DHK]

I'm going to point out something in your post that doesn't make sense to me.

Why did your father want you to "pay your dues" OUTSIDE of his company and industry? That's NOT "paying your dues". "Paying your dues" for this company would be starting at the bottom rungs and doing the jobs that everyone in the company does. In this case, being an insurance agent is NOT "paying your dues" to work for his company.

Why do I point this out? Because it's inconsistent with good management & leadership.

When I was growing up, I worked for my father in his cafeteria in a county building. However, I didn't stay in his office and crunch numbers. I was only 13, and he had me washing dishes with the rest of his employees. He also FIRED me at 13 as well. It's a great story! I'd rather be fired at 13 than at 18 or older.

Also, there's much more to consider than just the 'financials' of such a decision. You need to evaluate whether you have the leadership skills for working in your father's company and able to take it over successfully. You also need to consider your initial and ongoing roles within that company and how well you would work with the existing business management team and earning THEIR trust as someone worth working with.

I would buy the E-Myth book and then decide AFTER reading it. There are more dynamics here in this decision than where and how you want to earn your paycheck.
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It: Michael E. Gerber: 0099455020992: Amazon.com: Books

 

[TylerP]

I would need to see how serious a businessman your father is. "Pushing you to learn the business" sounds good but what does it mean in reality. You get to jump through hoops and hope you get the bigger pie in the longer run if you are good? Rather than a legally enforceable succesion plan that ensures that you are not going to just be left with mess and everything flucked up in probate trying to prove what dad "wanted."

If you are giving up something then dad needs to offer you a pathway where you get compensated. I would need to see something like a percentage of ownership passing to you each year you are there or an agreed upon severance plan where the dollars work for you. And I would need to see what his estate and business planning looks like a far as having done the legal homework.

Then it would get my attention bigtime. Dad needs to understnd that you are businessman now, not just a kid hoping for some crumbs if you are good boy. If he has you in mind for succession planning, he needs to treat that seriously or go find someone else. Just as you will be treating the opportunity seriously.

Note that I am not saying that he had to decide to have you as his successor before he is ready to do that and learned more about you on the job. Rather, I am saying that there is a cost to you going there and if he is serious there needs to be an understanding of what your severance would look like if you do not go into the next phase where equity in the company starts to build.

Of course, my response would be different if you said you hated your current venture and just wanted out. In that case you would have nothing to lose by just giving the freight business a try.

Great response and that is something to think about. To be honest, I don't see my dad retiring anytime soon so a lot of those questions do not have assumed answers. Some great food for thought.

I'm going to point out something in your post that doesn't make sense to me.

Why did your father want you to "pay your dues" OUTSIDE of his company and industry? That's NOT "paying your dues". "Paying your dues" for this company would be starting at the bottom rungs and doing the jobs that everyone in the company does. In this case, being an insurance agent is NOT "paying your dues" to work for his company.

Why do I point this out? Because it's inconsistent with good management & leadership.

When I was growing up, I worked for my father in his cafeteria in a county building. However, I didn't stay in his office and crunch numbers. I was only 13, and he had me washing dishes with the rest of his employees. He also FIRED me at 13 as well. It's a great story! I'd rather be fired at 13 than at 18 or older.

Also, there's much more to consider than just the 'financials' of such a decision. You need to evaluate whether you have the leadership skills for working in your father's company and able to take it over successfully. You also need to consider your initial and ongoing roles within that company and how well you would work with the existing business management team and earning THEIR trust as someone worth working with.

I would buy the E-Myth book and then decide AFTER reading it. There are more dynamics here in this decision than where and how you want to earn your paycheck.
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It: Michael E. Gerber: 0099455020992: Amazon.com: Books

Thanks for the post! Let me elaborate on the "pay my dues" portion because putting something in quotations doesn't suffice for a proper definition. What I was implying was that he wanted me to work under someone else for sometime. He wanted me to have the uphill battle of impressing your boss (not your dad) and working long hours. He wanted me to help obtain someone else's goals and most of all, he wanted me to gain some outside work experience as a young adult. As a teenager, I worked in the warehouses making palletized boxes, cleaning up the dock and minimal things like that but I didn't start from the bottom, per say and given our business, I wouldn't start from the bottom if I were to come on.

Now, with that being said, my job would fall under the category of sales. Our freight brokerage is only 2-3 years old and needs to grow and most of my attention would be aimed at that. I will be pounding the phones as hard as I do now, if not harder. So, in a sense, I'll be paying my dues right then and there. This won't be a glorified managerial position where I get to come in and play "prince", so to speak. I'll be knee deep in cold calling, prospecting, and closing.

I will definitely check the book out. I've been reading a lot about family owned companies and how they have a tendency to fail trying to transition through generational take overs but I just started that research.

 

[Winter_123]

I'm going to point out something in your post that doesn't make sense to me.

Why did your father want you to "pay your dues" OUTSIDE of his company and industry? That's NOT "paying your dues". "Paying your dues" for this company would be starting at the bottom rungs and doing the jobs that everyone in the company does. In this case, being an insurance agent is NOT "paying your dues" to work for his company.

Why do I point this out? Because it's inconsistent with good management & leadership.

When I was growing up, I worked for my father in his cafeteria in a county building. However, I didn't stay in his office and crunch numbers. I was only 13, and he had me washing dishes with the rest of his employees. He also FIRED me at 13 as well. It's a great story! I'd rather be fired at 13 than at 18 or older.

Also, there's much more to consider than just the 'financials' of such a decision. You need to evaluate whether you have the leadership skills for working in your father's company and able to take it over successfully. You also need to consider your initial and ongoing roles within that company and how well you would work with the existing business management team and earning THEIR trust as someone worth working with.

I would buy the E-Myth book and then decide AFTER reading it. There are more dynamics here in this decision than where and how you want to earn your paycheck.
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It: Michael E. Gerber: 0099455020992: Amazon.com: Books

The gentleman established that he is not dependent upon the family tit to survive. This too is valuable experience and a test that many family business employees could not even remotely pass.

Perhaps he and his father are not following textbook scripts and someone probably could point out a dozen reasons why the father would be a business dumbo. Except I gather that he isnt and that has to be respected. You are recommending a book entitled "Why Most Small Businesses Fail." That's fine and probably makes excellent points. However, it has not been established that the father has failed. He may be successful as hell and have money coming out his arse. That has my attention even if he broke some rules along the way. What successful entrepreneur has not?

My sense is that this guy is in a good place and will do just fine. So what if he flucks up a little along the way. He is 28. He is making an investment in dad;s world, and dad is making an investment in him. Let em work it out.

 

[DHK]

The reason for recommending the book is not about the title. The book goes into the relationships between technician, manager, and leader. It is this dynamic that comes into play within relationships and roles within a business that need to be addressed... not whether the business has "failed" or not.

 

[CASouth]

I would do both if time, energy and money permit; build your business and do part time with your family business; at your age I think its doable

Also if you do P&C and focus on Trucking Insurance; that's a big plus.

 

[rndz7]

Logistics. Trucks and shippng will always be in demand. The hard assets are already in place by your father. . Move on and never look back. Write insurance for just the trucking industry. Slow and steady wins the race. You will eventually have an insurance office in the trucking office, Now get the hell off this forum and go to work. DR

 

[TylerP]

Guys, I really do appreciate all the responses and input. Many of the sentiments you guys expressed are right along the lines with my thinking up to this point.

I plan on doing both and do both to my fullest capability. One will have to give eventually but that's ok. We'll let it play out I suppose.