When people build a business with their name on it, many things go into the decision. Ego is one thing, but so is risk. Confidence is another thing, but so is faith. But at the end of the current generation, there remains a decision: Do we pass the business along, sell it, or close it?
My research has indicated that one way to improve the odds of business survival from one generation to another is to sell the business to the next generation – don’t gift it! Selling the business, and the name, within the family gives ownership. Selling the business outside the family risks the legacy and gives up control of the one thing they can’t take away from you.
This is why so many family businesses are deciding on the tough direction of closing the business. Yes, walking away from the business, walking away from residual income, walking away and taking the name off the door. Now that is a tough decision.
But why do this? The name.
There are very few things in life that can’t be taken away from you. Your life, your liberty and freedom can all be taken away. Some have said that death and taxes are the only two certainties. Perhaps true, but so are degrees and your name. Once you have earned an academic degree, unless you cheated and it can be proven, the degree is yours. Same with your name – once granted, it is yours. That is why it is so important to protect it.
Recently, I ran into a thriving business that was closing its doors after decades of success. The firm had worth beyond the owners operating the business and could have been sold to an outside party and the company could have continued. I asked the owners why they were closing the business. Two words: the name. They wanted to protect their good reputation and they were not sure they could do that by selling it to another. There was no value high enough to cover the potential shame of losing the name or having it dragged through the mud in the future. So, the business closed.
But that begs another question. Should a firm ever be named after the owner? Names are replete with an energy all their own. They carry history, hope for the future, but sometimes negativity.
Need a demonstration? If my name was David Trump, what would go through your mind? You see, names have strong connotations attached to them, both right and wrong. When an owner decides she doesn’t want to risk the goodwill her name has accumulated after many years, do you blame her for self-preservation? The question this begs even more is, why name your business after yourself in the first place? Isn’t a name like Giganto or Acme safer than using your name? At a time of hysteria over #metoo, what if your last name was Cosby or Weinstein? Or let us give this a more historical context – Jefferson or Washington. Many a statue has fallen because of the name of the person, once heralded and now harangued.
The decision to walk away from a business with your name on it is a tough one. Perhaps before we decide on naming the business, we really need to think about whether the joys of having our name so boldly proclaimed is worth the agony should our name be sullied. When I named my pocket square business Borst: The Brand, I was not too worried that my product would be in some way demonized. Besides, every fashion house has its name on the door: Dior, Gucci, Wang, McCarthy. But remember, we can sometimes be tainted by others who work there and who have become infamous in their own right. Remember the chocolate company where Jeffrey Dahmer worked? What about the North Shore company that had millions stolen from it – rhymes with loss? See, I don’t even need to name the company…
The name, your name, is very important. Safeguard it by thinking long and hard before you share it with a door or a company.
