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The Success Behind Succession

Succession planning can take many forms for small business. Some business owners know precisely what they will do and lay the groundwork long before it might become an issue. Others know that their family has no interest in taking over the business and develop other ways to leave a legacy, and many just plan to sell the business when they decide it’s time to get out. This report takes a look at three different, yet successful companies, each with their own plan when it comes time to exit the business.

Bekker’s Catering

Olga Worm, CEO of Bekker’s Catering in San Diego and a theater lover, has mastered the rare art of running a family-owned business.

For 25 years, Worm has been successfully operating and growing Bekker’s Catering, an established catering and event planning business that she expects her son Scott to take the reins of it someday not too far from now.

Founded by her husband’s father, Dale Worm in 1958, Olga Worm and her husband Oscar first joined the business in 1980. Olga ran the business, then also a restaurant, while her husband wore the chef hat and ran food production.

Meanwhile, their children — Scott, Marla and Lara — also grew up in the business and were taught the value of a strong work ethic early on.

“When they were teenagers, I fired my office staff, and my children became my office staff,” Worm said. “Scott ran the dishwashing department and was the bookkeeper, Lara was 13 when she became involved in sales, and Marla was my secretary.”

In 2001, Worm sold the business with the intent to retire. But after travelling and unhappily working for someone else, Olga felt she wasn’t ready to retire.

In 2006, she opened West Coast Barbecue and Catering, a restaurant and catering business in La Mesa, and four years later reassumed ownership of her old business. The family ran both catering businesses for two years, then sold West Coast Barbecue and Catering in 2012.

Today, Bekker’s Catering occupies 8,000 square feet and has 100 employees, including multiple family members.

As Bekker’s corporate vice president and executive chef, Scott runs the food production while his wife, Jennifer, is the chief financial officer and human resources director. The couple had moved away for a while but returned with a keen interest on continuing what Scott’s grandfather started.

Meanwhile, Marla works part-time on special projects, and Lara and adopted daughter Heather are also involved, Worm said.

Bekker’s caters parties for 5,000 to 10,000 people, a split between weddings and corporate events. In 2013, Bekker’s reached $2.4 million in annual revenue, which Worm expects to climb to $3 million in 2014, given the continued growth.

“We’ve grown 20 percent to 30 percent a year since we’ve come back” in 2010, Worm said.

She still works 10-hour days, seven days a week, and has no immediate plans to leave the stage.

“Scott turned out to be the most reliable and serious worker and turned out to be a better cook than his father and grandfather,” she said. “My goal is to work myself out of the business, but not completely. Scott will eventually take over the business.”

Children’s Paradise Preschool and Infant Centers

Julie Lowen, CEO of Children’s Paradise Preschool and Infant Centers, started out by running a home daycare out of her house after grieving the loss of her own child.

Today, Children’s has grown to three early childhood education centers in Escondido and Vista. Lowen’s children have no interest in taking over the business, so she has taken steps to ensure her legacy of providing high-quality child care for low-income and higher-income parents will prevail.

She opened the first 7,800-square-foot center in 1993 on a half-acre lot in East Vista as a result of outgrowing her home daycare business.

“I opened with a capacity of 96 children,” Lowen said. “In the first week, we had 21 children and 85 in the second week, all through word of mouth.”

As the center’s reputation for providing high-quality care grew, Lowen responded by accommodating more parents. In 1996, she expanded the first site to add school-age children and a clubhouse, accommodating 150 children. In 2005, she opened a second 13,500-square-foot center on Melrose Drive in Vista, which can accommodate 156 children, followed by a third 10,500-square-foot site in Escondido last October. The newest place can accommodate 177 children, she said.

Lowen laid the groundwork for her eventual departure by creating the Smarty Patch Foundation last September.

“We got together with community members who have the same passion to leave a legacy, so moms can go to work knowing that their kids are safe,” Lowen said.

The foundation raises scholarship funds for children, equipment and supplies to help improve the center.

As Smarty Patch becomes stronger, Lowen hopes that the nonprofit will eventually take ownership of the for-profit centers while ensuring that the centers give back to the community.

“Our goal is to open 20 centers in San Diego with one being in every community,” Lowen said.

Fit-X Fitness

In 1995, Deno Bell started her personal training business at a local residential community simply to “get people moving.”

Today, the owner and founder of Fit-X San Diego and with her husband Scott manage some 125 independent contractors who provide some 400 personal training sessions and teach 800 group fitness classes at corporations and residential communities throughout San Diego.

“The biggest driver for our growth was to provide a lot of continuing education and team recruitment. Without our team, we couldn’t grow,” Bell said.

Bell hired her first apprentice in 1996 after teaching group fitness classes and providing training sessions at La Mirage Apartments in San Diego, where the couple lived and managed the fitness facility.

Bell said she and her husband do not currently have a succession plan in place, they’re too busy building the business.

“I knew I had all the ingredients to become a business owner, and my schedule filled up, so I hired an apprentice to get more people moving,” Bell said. “I knew I had a system that worked and wanted to replicate it.”

Supported by her husband, Fit-X grew mostly through referrals.

Knowing that education and sales training would be key to a successful collaboration with independent instructors, Bell took it upon herself to create programs for them.

“When I started my business, for instance, mind-body classes weren’t mainstream, but today it is,” she said. “We had to do continuing education so our instructors could provide what our customers were looking for.”

Another key ingredient behind Fit-X’s continued success is networking.

Bell belongs to several local chapters of San Diego’s Chamber of Commerce, which has been a platform for marketing her business to other businesses, she said.

Similarly, as a member of Think Local First San Diego, an initiative that also encourages local contracting of services, Bell stays abreast of community needs.

In 2011, Fit-X expanded into Orange County and last year, Bell also tapped into the Los Angeles market.

Her biggest challenge, she said, is to work with her four service coordinators in town to ensure all classes are covered and that all operations run smoothly.

“Our four service coordinators are the liaison between Fit-X and our clients,” Bell said.

She prides herself in having a nearly perfect record of taught classes, such as Zumba, boot camp and aqua classes.

Clients only pay for services that are being rendered and aren’t locked into a monthly contract, she said.

“This holds us accountable to provide outstanding customer service,” she said.

Bell admits that keeping her home life and job separate can be challenging at times.

“When we are ready to retire, we would sell the business or hand it over to someone who is passionate about getting people moving,” she said.

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