Small Business: Family succession - James Fisher, PJF Services

Brothers James (left) and Andrew Fisher, owners of PJF Services.

Small business editor Caitlin Sykes this week interviews a handful of small business owners about how they manage family succession.

In August last year, James Fisher and his brother Andrew took over the painting and surface maintenance business that was started by their father Phillip in 1972. Christchurch-based PJF Services currently has 29 staff.

Was it always the plan for you and your brother to take over the family business?

It wasn't really ever a formal strategy. But we'd always worked in it and I guess it was in the back of everyone's minds it would happen, mainly because our parents were getting older and the ways of doing business were changing.

I actually did a Diploma in Architecture when I left school and worked in the new housing industry for about five years before moving into the painting side of the family business in 2012. And my brother Andrew had worked in the hospitality industry, selling hospitality supplies, for about 15 years before he joined the family business about six to 12 months after I started.

Essentially, it was an opportunity to get into business at a relatively low level of risk. We could see there were ways we could improve how the business was operating, and we felt we had some experience and different ideas to freshen it up and grow the business. And obviously we could see there was going to be a reasonable opportunity with the Christchurch rebuild.

Can you talk me through the process you went through to transition the business from one generation to the next?

It really started when we first came to work in the business. When I started there was only myself, my father and four or five workers in the team and the idea was for me to build the business in a general manager-type role. One of the first things we did was implement systems around things like accounting. Then we set about developing a plan to increase our market share; at that point it was very little, and we had one main client, which I could see was a risky situation. The business had a good name in Christchurch and had been around for a long time, and we wanted to use that to build the brand going forwards.

At that stage, we were just working as employees, but we started to see good growth - around 20-30 per cent a year. As the business evolved and became more systemised, I guess the difference between how my father had run the business, and how we wanted to run it was becoming pretty evident. He couldn't really understand why we were doing things the way we were doing them and that were different to how he operated. It got to the point where we had a frank discussion about the direction of the business and that the status quo wasn't going to work. We needed to have a united front leading the business forward.

We then had a series of meetings where we brought in external advisors to look at the different options and discuss how we might make the transition. We worked with two consultants who we'd already been working with - one was a business advisor and the other a practising accountant. It was agreed we'd take the business over, with a plan for us to keep employing our father. That whole process definitely had its ups and downs.

So your father still works in the business?

He does, but not full time and our employing him in part is showing that goodwill for the business he built up. We actually set up a new company and brought the operations of the family business into that. Again, external advisors - our accountants RightWay - were a big help with the final sale, and have continued to be a help as issues have come up.

What factors helped with transitioning the business?

Bearing in mind you're dealing with family, the number one thing that helps is getting external professionals in to mediate the process, and between the two parties. That was really good because they looked at it at arm's length and viewed it as a commercial transaction. That helped both parties realise that although we were family we were going to treat this like you would a commercial transaction with any other party. The other thing that helped was being really open and honest in our communication. That's a critical factor.

What about the challenges?

The biggest challenge was in the lead up to the transition. We were giving the business what it needed, but also trying to bring our father along the way even though he couldn't really understand our thinking around how business is done these days. That was the biggest challenge, negotiating those differences in mentality.

• Coming up in Small Business: What do small business owners do when they have a baby? If you've got a story to tell about how you've handled your own parental leave as a business owner drop me a note at nzhsmallbusiness@gmail.com.