Succession Case Study: Crowe Marine

It happened quickly.

Bill Crowe had been working at his family’s dealership in East Point, Ga., for nearly seven years. Then, one day in 1971, his father, C.D. Crowe Jr., suddenly passed away. The tragedy of the loss, from a personal standpoint, was only compounded within the business, as Crowe Marine was faced with an unknown future.

Without a succession plan, Bill and his wife, Julie, were left to navigate the future of the business, a difficult course that involved them buying out a sibling’s shares and left the scars of damaged family relationships in its wake.

Needless to say, the experience made an indelible mark on the new owners, so when their son, Brian, joined the business, they were intent on handling things differently. They would create a plan to make the transfer of ownership as smooth as possible for the dealership and, more importantly, for the family.

“Everybody needs to know ahead of time what the deal is,” explains Bill, who moved Crowe Marine from south Atlanta to the affluent Lake Oconee soon after Brian joined the company full-time. “When someone passes away without a plan, you’ve got yourself a big problem. If it’s not in black and white, the surprise can tear up a family.”

The experience of the first transition has informed step after step in Bill and Julie’s long-range plan to turn the business over to Brian. They are gifting stock to him over a number of years to avoid tax issues. But even the most well-laid plans can be fraught with challenges, such as the rough economic conditions over the past three years.

Bill is adamant that communication is the best guarantee a business can have to ensure the smoothest possible outcome when transitioning from one generation to another. That doesn’t mean, however, that there won’t be pitfalls.

No matter how logical and carefully crafted the plan, family dynamics, a company founder’s natural entrepreneurial spirit and differences in opinion between one generation and the next are all powerful factors to consider.

For example, Bill has historically run the business on what he calls “gut feel.” There’s been no formal business plan or budget — which is exactly the way his father had run the business — and Crowe has shown a strong bottom line most every year with the strategy.
In beginning the plans for succession, though, he realized that “Brian may discover that he can’t use that approach,” so the two began sitting down regularly to allow Brian to analyze the financial state of the company.

Brian, along with his wife, Beth, have learned first-hand that they work better with visual data as opposed to gut feel. That knowledge has allowed the couple to add more technology-based tools into the dealership, such as a new online budgeting template the company purchased from Parker Business Planning.

“Crowe Marine is a great example of many family businesses which may struggle with transitional phases of the business from one generation to another,” explains Beth Crowe. “The generational gaps become more and more evident each year as technology changes. Bill continues to monitor the financial health of the company via his methods, while through the online budgeting process, I can now print out a summary variance report to give to both him and Brian. The visual report may confirm what Bill had concluded, but most importantly it gives Brian the ability to look at the numbers in a very visual way.”

“You’ve really got to think about these things,” Julie explains. “We’ve had the good, the bad and the ugly. Hopefully, we’ve learned something. We didn’t want to leave Brian in a mess. He’s working in the business and doing a good job. We want to protect his interests.”

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button