Selling your business is an exciting and scary moment for any business owner. In many cases, you are handing off your life’s work and trusting an outsider to come in and continue to build on your legacy. That’s why no matter how long you’ve been in business, it’s essential to have a succession plan in place well before you intend to implement it.
We spoke to Todd and Ryan Kletz of One Hour Heating & Air Conditioning of Hampton Roads/Virginia Beach to learn about how succession planning has set their business up for success.
Todd started his HVAC company in 1979 and in 2005 he bought out his partner to become the sole owner. Ryan, Todd’s son, had gained some sales and customer service skills working in the auto industry, but by 2008, he had traded in his shirt and tie for a One Hour uniform.
“I spent the first six months as an install helper and then trained on doing tune-ups,” said Ryan. “This allowed me to gain a better understanding of what our techs do and their experience. From there, I transitioned into our Client Care team.” Ryan would spend five years learning the ins and outs of booking jobs, dispatching trucks, and all things customer support.
While Ryan was working in the business, his father Todd was working on it. “Succession and retirement weren’t really ever foremost in my mind until one day in 2015, I realized that I DID want to retire one day,” he said. “Thankfully, Ryan was already entrenched in the business and was seen as a leader among the staff. I was really fortunate because it might have been too late to come up with a succession plan when I finally realized I wanted to retire one day.”
Working with family can be complicated, and transitioning ownership comes with its own unique set of challenges. “I knew I wanted this to remain a family business, but we had a lot of groundwork to lay down in order to keep it that way,” shared Todd. “In order to begin transferring ownership, I needed to involve accountants, estate attorneys, our private equity firm, etc., to get a plan together for what we wanted to do and how we could do it.”
Trust is also a huge part of the transition process. “When you realize someone worries about the business and the success of the business as much as you, I knew that he was someone I could trust with taking the reins,” said Todd.
Todd had some advice for franchise owners who are looking at their own succession plan:
If you haven’t thought about it yet, you need to start now. Look at your business as an asset rather than a job.
Get your finances in order. If you’re not going to hand the business over, you’re going to want to sell it. Eliminate debt. Implement a management team who knows your company inside and out and understands your systems and processes.
Think broadly. It was important to consider other family members who weren’t involved in the business and how this might affect them.
As for the future, Ryan Kletz says it’s quite bright. “We are looking to continue to grow both organically and through acquisition, building a company that continues to offer sustainable careers and life changing opportunities for each member of our team.”