SUCCESSION PLANNING
relationships,” Cody explains. “We rely heavily on our vendors, time, and investment with each other. Coming in new, we started with a blank slate and didn’t know what to expect.” This creates what Mohr calls the “hub” problem. “If you are the hub, your business actually has less value. If the decision-making capabilities left with the previous owner, that’s a problem.” The solution requires hir- ing the right people but more importantly, empowering the right people. “You don’t just give them a title, you give them the accountability,” Mohr explains. “If, ultimately, the business owner is still making those calls, that’s not true accountability; you need to empower or transfer, align, and assign your authority.” The Havertines learned this lesson during their due diligence process… the amount of vetting that had to take place to secure the loan and stones unturned that had to be reconciled, Brett recalls. While challenging, he calls it, “a blessing in disguise to iron out some wrinkles before the purchase happened.” They built structure into their transition: “We laid out a tran- sition plan in the purchase. Ed stayed on board for six months, helped me through a full buying season. And we were having him in-store four days a week then tapering off,” Kyle explains. Gaining employee trust required careful balance. “One of my goals was to come in and gain their trust,” Kyle notes. “There’s a reason Trail Creek has been around for 40 years as a staple in this community. While we’re a fresh set of eyes, we consciously had the intention not to bulldoze everything that’s been built here for 40 years.” At the same time, the brothers knew that growth was essential. “That’s part of what we had to sell Ed on… that growth is necessary
drinking from a firehose.” But both families were realistic about the challenges. “We knew it would be a very challenging onboarding, a lot of embedded information, a lot of moving parts, and we had never operated retail stores,” Cody notes. The sisters recognized they needed each other, and Lauren agreed she would only do it with Cody. “It’s a very nice yin and yang scenario,” Lauren says, “we have full trust in one another.” At another well-known first-generation specialty shop, Canyon Pass Provisions in Fair Haven, New Jersey, Alisha and Pe- ter Maher took a more deliberate approach when they officially took over from founders Genevieve and Derek DeBree this past January. “I had already been managing and buying for the store since 2022, so when the opportunity came up it felt like a natural next step, but we still wanted to be thoughtful about the transition,” explains Alisha. Their success came from treat- ing succession systematically: “We asked a lot of questions along the way, especially around financ- ing, vendor relationships, and how to make sure the handoff felt seamless for staff and customers. The biggest surprise was how many small details there are to sort out: contracts, accounts, li- censing—all of it takes more time than you expect.” The Owner Problem “At most small businesses, the decision-making takes place in the owner’s head,” explains Mohr, who has been coaching business owners for seven years after spending 15 years as a business owner and retailer. “No one can read their mind. Any decision that comes by, the owner has to be there. It’s one of the innate problems with small businesses.” The Browns experienced this challenge directly when they took over. “We didn’t have the vendor
The 8 Key Value Drivers for Your Business Is your outdoor retail business transferable? Use Pete Mohr’s framework to assess where you stand: 1. Financial Performance Are you tracking a reliable future stream of profits? Can you prove your numbers going back at least three years? Financial buyers are purchasing future profits, so make sure yours are solid and documentable. 2. Growth Potential Focus on products and services that are valuable, teachable, and repeatable. Growth that depends solely on the owner’s relationships isn’t scalable. 3. The Switzerland Structure Achieve neutrality by avoiding over-dependence on any single supplier, employee, or customer. No single customer should represent more than 15% of your revenue. 4. The Valuation Teeter-Totter Understand that your business value moves in the opposite direction of your working capital needs. Businesses requiring significant cash flow have lower valuations. 5. Recurring Revenue Track predictable income streams. Subscription services, service contracts, and repeat customers all increase business value significantly. 6. Monopoly Control How are you differentiating from com- petitors? Whether through community involvement, in-store experience, selection, or specialized expertise, differentiation drives value. 7. Customer Satisfaction Implement a Net Promoter Score (NPS) system. Ask customers: “How likely are you to recom- mend us to a friend or colleague?” Track and benchmark your score against industry standards. 8. Hub & Spoke (Owner Dependency) The biggest value killer: Are you the hub of all decisions? Signs you’re in the “owner’s trap” include being the primary salesperson, business slowing when you’re away, and customers coming directly to you when problems arise.
GRASSROOTS STORIES 21
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