Having a succession plan in place helps ensure your business can carry on even if there’s an unexpected loss at the top of your organization, or if the leader of the organization is ready to retire.
The best succession plans put a heavy emphasis on the development of new leaders, a plan that will make employees who are selected as replacements feel valued and challenged moving forward.
A lot of times these individuals who are being groomed for top roles are family members. Even with a family member eyed to replace their father or mother, a succession plan is needed to help move things forward.
In Ryan and Jeff Moore’s case, it was a little more complicated than that.
How Things Can Get Complicated
Jeff Moore is the co-owner and president of GTI Millwork in Wilmington, Delaware, and is leading a succession plan for his son, Ryan, to take over for him.
However, Jeff is partners with somebody else in the business and that’s made the succession plan a little harder to plan out.
“If it was just me taking over for my dad, that would be super easy,” said Ryan, who is currently the general manager. “Inheritance is the easy part. In this case, we have to meet the demands of the exiting partner and we have to make sure everybody gets set up the right way. There are a lot of moving parts and pieces to this.”
Once the buyout of the other is finalized, GTI Millwork is going to apply to an economic program called the “Grow Delaware Fund,” that is partially funded by the government. Hopefully they will sign a 10-year term where they can buy new equipment – and possibly move to a new location – that has low-interest rates attached. However, there are no guarantees that will happen until the other partner is completely divested from the business.
“The Grow Delaware Fund is something to help us grow. It reduces our outflowing cash flow for a while,” Ryan said. “We need working capital and low interest rates as we grow. Our outgoing partner is older. He didn’t want to sign for anything that takes on new debt.”
Ryan wants to get the loan from the “Grow Delaware Fund” to buy new machinery for the business. GTI Millwork does custom architectural millwork, fabrication and design for businesses.
Growing In the Future
Most of their work includes cabinets, reception desks, nurse stations, wall panels and wood trim.
“We have a healthy, active business that needs to grow, but we have a partner that didn’t want to sign for any new debt. It’s been a big challenge, but it’s really spurred us to try and get this roadblock out of the way,” Ryan said. “We went to industry seminars on succession planning and learned a lot. There is a lot to think about.”
Ryan, 37, has worked for his father for nine years. GTI Millwork is in its 29th year of business. Once they have bought out the partner, a succession plan will officially kick into high gear. Jeff plans to work for at least another five years before succeeding to his son.
“We’d like to purchase a location for the shop – we currently lease,” Ryan said. “We’d also like to open more businesses if possible. We’re looking to grow as much as possible. We have 14 employees and we want to help them grow as well.”
Ryan has big dreams for GTI Millwork. He wants to expand the products and services that they offer, including possibly windows and doors – or even general contracting.
“That’s not far from what we do right now,” he said. “Ideally, I want to set up systems and processes here that will allow me the freedom to explore opening other businesses and starting other ventures.”
How New Equipment Has Helped
GTI Millwork recently financed a CNC router with Stearns Bank. The router has already paid dividends for the business.
“Stuff that used to take us two days now takes us two hours. Our efficiency has really improved with the addition of the router,” Ryan said. “I worked with Jenny Wood and Missy Vos at Stearns Bank and everything went smooth during the equipment financing process.
“They responded really quickly and always got back to me. I’d send an email and they’d get back to me the same day. Tons of people don’t do that anymore. It was impressive.”
Business has been booming at GTI Millwork and Ryan doesn’t see things slowing down anytime soon.
“People are building right now, especially new buildings and renovation projects. If that keeps happening, we’ll continue to grow,” Ryan said. “We need new schools, office buildings and hospitals. We’re slammed like everybody else is in the construction field right now.”