Last week I had the pleasure of speaking to the Mobile chapter of the National Association of Insurers and Financial Advisors. This was especially important to me because these professionals advise many of the small business owners I'm trying to reach with my book. Family-owned businesses and closely held corporations benefit greatly from their advice on how to plan for future succession. While these professionals help owner/managers with what they need to do, many of their clients won't act until they understand why they need to plan ahead.
I was thrilled that some of those I met with after the speech expressed a desire to buy large numbers of An Act of Congress - The Real-Life Story of Power & Politics in Family Business to send to their clients. They agreed that my book makes a powerful tool to encourage business owners to plan now rather than hope things work out over time. They don't!
I hope you enjoy the talk I gave to NAIFA - Mobile. I'd appreciate any comments you may have.
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Thursday, April 30, 2009
Thursday, April 9, 2009
Government Takeover?
More than one of the readers of my book, An Act of Congress - The Real-Life Story of Power & Politics in Family Business, made the point that our small family business experienced a government takeover, well before today's experiences. Their point is on-target! Way back in the early 90's, a government entity decided that they didn't like the way our family was running our own family business. The judicial sector of our government decided to take our ownership rights and transfer them to a court-appointed board and receiver, controlled entirely by the minority owner.
I won't use this column to rehash the details of our situation. I hope you will purchase the book at my website, www.tommyfulton.com, and take the opportunity to read how messed up life can get when government decides to take away the rights of business owners.
I will tell you how crazy this seemed to so many during the removal period. One of the biggest questions people had, whether they were paying close attention or not, was the same question we had. "How can the government just take your company away from you and give it to someone else...after all, this is not Russia?" Believe me, we wondered the same thing. There are some who believe that kicking my family out of our company and replacing it with the minority's board was a lifesaver for the company. They state that the financials of the company were in better shape than when we were kicked out.
Here's the problem...there is no way to prove what would have happened if we had been allowed to keep our company. We maintained that we would return to profitability soon, because we had already taken action to curtail the losing divisions. The only thing we needed was time to allow financial commitments to expire, which were scheduled during the next 12-18 months after we were removed.
The bottom line is that when the principles of risk and reward, inherent in our free enterprise system, are violated, a vital piece of our economic freedom dies. I'm not defending all of the leaders of today's companies, but I will never believe that the government is the best entity to decide who leads the companies. That is the sole responsibility and right of the shareholders who have invested in the company.
Lastly, one of the biggest problems comes about because the government decides to prop up failing companies, taking taxpayers money to decide who will succeed and who will be "small-enough" to fail. Ultimately, that takes the power out of the free market and gives it to politicians. Our family felt the negative side of government intervention well before today's foibles.
I won't use this column to rehash the details of our situation. I hope you will purchase the book at my website, www.tommyfulton.com, and take the opportunity to read how messed up life can get when government decides to take away the rights of business owners.
I will tell you how crazy this seemed to so many during the removal period. One of the biggest questions people had, whether they were paying close attention or not, was the same question we had. "How can the government just take your company away from you and give it to someone else...after all, this is not Russia?" Believe me, we wondered the same thing. There are some who believe that kicking my family out of our company and replacing it with the minority's board was a lifesaver for the company. They state that the financials of the company were in better shape than when we were kicked out.
Here's the problem...there is no way to prove what would have happened if we had been allowed to keep our company. We maintained that we would return to profitability soon, because we had already taken action to curtail the losing divisions. The only thing we needed was time to allow financial commitments to expire, which were scheduled during the next 12-18 months after we were removed.
The bottom line is that when the principles of risk and reward, inherent in our free enterprise system, are violated, a vital piece of our economic freedom dies. I'm not defending all of the leaders of today's companies, but I will never believe that the government is the best entity to decide who leads the companies. That is the sole responsibility and right of the shareholders who have invested in the company.
Lastly, one of the biggest problems comes about because the government decides to prop up failing companies, taking taxpayers money to decide who will succeed and who will be "small-enough" to fail. Ultimately, that takes the power out of the free market and gives it to politicians. Our family felt the negative side of government intervention well before today's foibles.
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