April 5 , 2000

WHO WILL SUCCEED YOU?

Frank Dougherty Jr., owner of Carlisle Machine Works, was arriving at a point in his life, that many small business owners arrive at when they are ready for retirement, what should he do with his business. Carlisle Machine Works, Millville, was founded in 1913 and was purchased by Mr. Dougherty in 1982. Carlisle manufacturers gas burners, combustion components and automation machinery.

Mr. Dougherty tried to sell his business, but the offers did not produce what he thought the business was worth. Then his son and son-in-law approached him to purchase the company, however from a past experience, Mr. Dougherty had been through a business transition that failed. He wanted his business to survive.

A New Jersey Manufacturing Extension Program Inc. (NJMEP) field agent, Bucky Wellman, contacted Carlisle and performed a no-cost manufacturing business assessment, called QuickView. Through the assessment process, Bucky learned more about the company, and was able to identify the need for Succession Planning.

Bucky put together a transition plan, that will run for eighteen months, as well as a transition team that is comprised of the son, son-in-law and daughter. In the spring of 2000 ownership will change hands. New Jersey MEP will continue to work with them after the transition, to make sure the business plan is being followed and to ensure the success of the company. Bucky stated, “ That this is the most important personal and business decision that a person has to make.”

Successions without planning have a low probability for success and a high probability for failure. Bucky states, “Often transitions fail – 40 – 50%, with a second generation survival rate of only 20%. Most business owners have their net worth tied up in the business, which makes a successful transition important. A successful transition should be started two to five years before retirement.”

Mr. Dougherty said, “New Jersey MEP brought them together to work together for this transition. The option of selling the business could mean a loss of jobs, if the new owners moved it out of the state, or failure.” This process is saving jobs and has created a plan that will keep the company on the right path to success.

New Jersey MEP, a not-for-profit organization, provides small and mid-sized manufacturers with access to technology and business management tools. The program, which was modeled on the Agriculture Extension Program, utilizes Field Agents assigned by county to enhance a manufacturer’s ability to take advantage of New Jersey Manufacturing Program’s network of academic and private resources. While New Jersey’s MEP has only been in existence for four years, the program has been in place nationally since 1988 and boasts a total of 75 centers across the country with at least one in every state. NJMEP has provided help to over 450 New Jersey manufacturers with industrial modernization or business management experience since its inception. Services range from writing Employee Handbooks to developing Product Prototypes to Chemical Material Analysis. To contact NJMEP, please call 1.800.MEP.4MFG or visit us on the web at www.njmep.org.

Top of page.     Previous Page.