Going Pro: Retiring to Management By Douglas Bittinger Smoky Mountain Woodworks   This final article in our series deals with a subject I have not yet faced personally and is therefore based on the research I've done into the subject and extrapolations from years of experience in personnel management. However, since individual situations will vary greatly and the socio/political/economic climate may be very different when you are ready to do take this step from what we are experiencing now, it is difficult to offer a detailed plan that will work for everyone. So presented here are some general guidelines as food for thought while you work toward this point in your woodworking career. There may come a time when you will want to step away from the day-to-day woodworking of your business and focus on other things. Perhaps you want to devote yourself to designing new pieces, perhaps you want to work on promoting the work your shop produces to increase sales volume, perhaps you want more time to fish, play golf or spend time with the grand kids. Whatever your desire, stepping back from the daily operations requires some planning if it is to go smoothly. If you plan to keep your hand in and retain some ownership of the company, you have two paths to choose from. One is to turn over the daily woodworking/production work to an apprentice (whom you have been grooming for this purpose) who then becomes your production manager or foreman. The other is to take on a partner who will run the production side of things while you handle the esoteric side of things. Both paths have advantages, both have drawbacks, and both can lead to ruin if badly handled. The Woodworker's Apprentice If yours is a very small shop and the new guy will be carrying on alone or with one helper, the issues are very limited. Your only real concern is whether the apprentice will continue to do the work with the same diligence you did. If you have trained him or her well, that should not be a problem and you may focus on the tasks you want to take on and trust the new guy or gal to handle production. Don't abandon him or her in the new position, but don't hover either. If you have three or more employees, you are already a personnel manager even if you've never thought of yourself that way. Making a hand-off of production management is often the least traumatic to your clients and staff when it is someone who has worked along side you for quite some time. It is possible that you could hire someone from outside, someone with experience in the position, but unless no one in your own staff is qualified — and they know it — or if they are unwilling to step up to the plate, bringing in an outsider will create hard feelings that will be counterproductive. If you are grooming someone to be your replacement, make no secret of this. If handing the production floor over to you protégé is going to create problems, let these feelings come to the surface before the change-over happens so you can deal with them. Generally a transition period is warranted so you can see how the new manager handles the responsibility and how the staff reacts to his or her management style when you are not right there. Before turning over the reins, make sure the two of you have a complete understanding of what the new production manager's responsibilities are and what compensations are being offered. Make sure you are in agreement on what your new role will be in the company. Since you are still the owner of the company, you retain all final authority — and responsibility — for the company, but asking someone to help shoulder the burden of management means giving them some room to work too, and fair compensation. Once you put someone into a position of authority, you must back them up in that position. Do not let employees do an end run around your new P.M. with issues that he is supposed to be handling just because they'd rather talk to you because that's what they are accustomed to doing. If the P.M. makes an issue of something, you have to support that decision with the staff — even if you don't totally agree with it — or you'll kick the chair out from under your P.M.'s ability to manage. If you do not agree with the decision, discuss it privately with the P.M. and suggest a remedy that will allow him or her to redirect the situation. Do not snatch it out of his hands and deal with it yourself. Likewise, do not step back in and handle something the P.M. should handle just because he or she is not comfortable with it. Coach him, support him, encourage him, but don't stand in for him. It is his job. Let him do it. Do not turn a blind eye though. It is still your business and you need to know how it is running. You should be able to do an even better job of this than before because you have been relieved of the production work. Is the quality of work staying up to your standards? Are timetables being met? If customer relations are involved, are they being maintained? Is the money and inventory right? I've known several "good" people who found themselves in a bad situation and decided that since they were in a position to do so, and no one was really watching, they should be able to "borrow" something from the company. In each case they intended to put it back once the fix they were in was past. But it rarely works that way. If they get away with it once, they'll do it again, and again until they're in too deep to ever get out. If you suspect that money or tools are disappearing, confront the issue immediately. Do it gently. Offer to help with a loan. Make it clear that theft will not be tolerated, but there are other ways. Vigilance must be maintained for as long as you are the owner. Even trusted, long-time employees are human and can find themselves tempted. It is your business. Keep an eye on your inventory and your bank accounts. If your intention is to fall back into semi-retirement and devote more time to a favorite pastime, and you find you are not as interested in maintaining the books as you should be, hire an outside accountant to do the heavy bookkeeping and oversee the important processes. If you completely lose interest in the business, offer to let your P.M. buy you out. If he or she can not or will not, then get ready to sell it. Once you no longer care enough about it to take an active interest in the business's operation, it is time to cut the cord and walk away. If you are not willing to steer the ship, you have no right to be dismayed when you end up somewhere other than where you wanted to be. Taking on a Partner Setting up a partnership involves many of the same issues discussed above but adds to the mix the fact that you are no longer "the boss." A partnership means that both partners share management responsibility and financial gain — and loss. Normally bringing a partner into an established business means either the partner buys into the business with a cash payment of half the business value or two shops are merging with each bringing approximately equal assets to the new company. It is especially important to have a good clear picture of your financial standing and clean books before entering into partnership negotiations. Hire an outside auditor to go through your books and find any discrepancies that may be used to raise a bone of contention farther down the road. How the new company is to be run, how the profits are to be allocated, and how the assets of the new company are handled are all details that must be ironed out and agreed upon. In this case hiring a business lawyer, or experienced business consultant, to hammer out the partnership agreement can save you massive headaches farther down the line. Once again, someone you know and trust and who seems to be an honest and respectable person can end up turning on you and making you seriously regret ever getting involved with them. Even if you never have a disagreement, you must look to an understanding of what will happen if the partnership is dissolved or the company sold. What happens if one partner retires or dies? Do not wait until these issues come up to decide these things. Having contingency plans for all possible, foreseeable situations down on paper before the deal is done will prevent bitter disappointments later on. A good business lawyer or consultant will have all the answers and help make this an easy process. Once the Deal is Done If you've laid a proper foundation for the new business structure, once the deal is done, whether you handed off part of your former responsibility to an employee or took on a partner, life should go as you planned it. As the Bible says, (paraphrased here): "If you build a house on sand, the rains will come, the streams will rise and the house will be swept away, but if you dig down and build your foundation on solid rock, the rains will come and the torrents will rush against your house, but it will stand against them. (Matthew 7: 24-27) We at Smoky Mountain Woodworks hope you have enjoyed this series of articles, and have profited from them. We wish you success and fulfillment in your business as a woodworker. Please feel free to drop us a line and tell us what you thought about these articles at Info@SmokyMountainWoodworks.com . And may the sawdust be with you! For your convenience, here are links to all the articles in the "Going Pro as a Woodworker" series: Taking the Plunge into Professional Woodworking Is Self-Employment Right For You? A Suitable Workspace Tooling Up Finding Good Suppliers Financial Tools Setting Prices Marketing Your Work Hiring Employees Retiring to Management Douglas Bittinger has been building custom fine furniture for over 25 years, and has been lead repair tech for a major furnishings retail store chain. Along with his wife, Marie, he currently operates Smoky Mountain Woodworks in Edwina, TN. Return to Wood News front page