It takes a unique father and CEO to balance the intersection of a family and a business. Putting family members in key positions of your business can be dangerous without written expectations and a timeline for control, advancement and responsibilities. They Allow Idiot Family Members to Run Key Divisions of the Business Learn from Ocean Pacific and don’t embark on new strategies for growth without acquiring the right management team first.ģ. The company was restructured through bankruptcy, selling its licenses to a private equity firm. Once again, the management team couldn’t handle its responsibilities. Not only had the company lost control of its brand, entered into poor licensing arrangements and become embroiled in trademark issues, but they had accumulated a ton of debt. Many years later we were brought back in for a similar reason. Though they lost a ton of money before we arrived, we were able to scale back to domestic manufacturing and refocus the company on design and licensing. The first time was because they were expanding overseas without the proper personnel who understood sourcing and distribution in international markets. The corollary to having enough capital to grow your business is having the right management team to do so as well. Growing a Business Without a Sufficient or Competent Management Team Let that be the first lesson: make sure you have enough capital before making any big moves.Ģ. Not only did he bet the ranch, but he tried to grow and evolve his business without sufficient funding to keep it running. He effectively leveraged the entire company by borrowing against it to pursue this dream. I once carved an injected molding company in Toledo, OH like a Thanksgiving turkey because the president sunk $2.5 million into his pet project: making the perfect bottle-cap. It’s never wise to try to grow your business without enough money. Growing a Business Without Proper Equity or the Right Financial Structure Since you may not be facing a crisis right now – and I hope you never are – I wanted to share these blunders with you so that you could either avoid them or start rectifying them.ġ. My last white paper was about the faux pas of CEOs in crisis, but in writing that paper I started thinking about some of the biggest mistakes CEOs, presidents and business owners make that result in crises.
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