GREENE — Dennis Hobson has owned and served as president for American Tool & Engineering Inc. in Greene for 25 years. A few years ago, he decided he’d like to someday retire.
Hobson attended a business seminar with his daughter, Sonja — who is transitioning to own the business with her brother, Matt — that started them on the path to pass the plastic molding company onto his kids.
“What you hope for is you go to one of these, and every question you have is answered. ‘Oh, I’ve got a plan now,’” Hobson explains. “Well, what you do is you go to one of those and you put up this idea and this idea, and then you maybe go to another one, and …”
Hobson adds, “I think everybody is unique, so they’re going to have a different picture of how they want to see it.”
To take some of the mystique out of succession planning — whatever form it takes — the University of Northern Iowa’s Advance Iowa and Butler Grundy Development Alliance have partnered on a $50,000 grant through the U.S. Department of Agriculture to work with businesses like Hobson’s.
The partners plan to host a series of events next month to begin those discussions and will work one-on-one with businesses looking to make a plan. Though the grant applies only to Butler and Grundy counties, Advance Iowa includes succession planning as part of its daily mission.
The meetings will be held as follows:
5:30 to 7:15 p.m. Nov. 9 at Grundy Community Center, 705 F. Ave. in Grundy Center. To RSVP for this event, contact Bobbi Finarty at 825-6742 or firstname.lastname@example.org.
5:30 to 7:15 p.m. Nov. 16 at 202 W. South St., in Greene. To RSVP for this event, email Jeff Kolb at email@example.com.
Both events will begin with dinner and networking before transitioning into a presentation with discussion.
Dan Beenken of Advance Iowa, which will be administering the grant, said it’s a growing issue in Iowa. Studies show about 79 percent of business owners want to exit their business in the next 10 years, and 83 percent have not created a concrete plan for their exit, whether it is to sell the business or transition to new owners, like family or longtime employees.
Those figures are exacerbated by the fact so many adult children have moved from Iowa’s rural areas, where their parents’ business may be based.
Kolb, executive director of Butler Grundy Development Alliance, said Hobson’s business is a “perfect poster child” of a business in transition. Hobson had hoped to retire around 70, and he’s there, but he’s also managing less of the day-to-day operations.
“Our organization is teaming up with UNI to help businesses, if nothing else, start to think about the future and succession planning, which a lot of folks don’t even think about it, or if they do it’s either too late or not far enough ahead to when they need to get everything in place,” Kolb said.
Hobson also is lucky to have children who want to take over the business, which employs about 50 people, most of whom live in the small town in Butler County.
“Like my dad said, you have to have a job, so why not work for yourself, and you have to work somewhere, and you can make it as fun and whatever you want it to be,” Sonja Hobson said. “It’s nice to have that responsibility. It’s a challenge. You never get bored. There’s always something you come into every day.”
Hobson, meanwhile, is finding it easy to enjoy semi-retirement, fishing on the Shell Rock River and planning a long holiday in Florida.
But he acknowledges the business is still very much in transition, and selling the business to his children has been a process.
Kolb said it also can be a tricky discussion to start — some owners don’t want to acknowledge they can’t always run a business, or know their children won’t want it, or fear losing the business by being bought out by a competitor.
“We’ve had some very integral businesses in some communities, (their) ownership retire and did not have a succession plan and those businesses are now gone, and we now wish that we had been having this conversation seven to 10 years ago with those folks,” Kolb said.
He continued, “I mean in Greene, Iowa, if this door would close, and those jobs would go some place else, 50 employees has a huge impact in a town the size of Greene or a county like Butler County.”