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Last Update: Tuesday November 19, 2019

Key Idea: Step Aside For New Leadership

Host Hattie Bryant says that Alvin Murstein is brilliant to step aside but stay.

Key Question:

A: 

You heard Andy. His grandfather did everything himself.  His father brought in a level  of professional management as he had the opportunity to get some education.   He expanded the existing business beyond anything he could personally oversee and had to learn to delegate. Now Andy, the third generation, brings a new and broader vision of expansion to the company. Each is unique and, in combination, they have built a thriving diversified company.

Q: What does a business owner do to ensure that his business is carried on?

A:
Legacy planning is one of the biggest challenges a business faces. We saw Medallion handle three critical success factors extraordinarily well.

Don't Just Hand over the Keys. Andy's grandfather worked with Andy's father and Andy's father worked with Andy. Each successor was carefully groomed to take over the reins. This is critical to ensuring a smooth transition.

Respect the Heir. No one will make the same decisions that you would have made and choose the same path that you would have chosen. Don't hamstring the legacy by expecting to clone yourself.

Keep Disagreements Private. The keys to the Executive Washroom are best passed over gradually and there will be disagreements during the transitional period. Neither employees nor customers should be aware of even the remotest hint of conflict. Conflict is natural and healthy as the legacy is implemented but is best kept private to ensure that its significance is not overstated.

Think about it

If your exit strategy includes an established legacy, do you have a legacy plan and a timeline for its execution?

Clip from: Medallion Financial

New York City:  Meet Andy Murstein.   He is the grandson of the founder of a taxi business.   Andy has transformed that business to be a bank for immigrants, minorities, and women.

Andy's grandfather began as an immigrant taxi driver.  By the time Andy's dad joined the firm, they had a fleet.  They then began financing the acquisition of taxi medallions for new immigrants.  They became a Small Business Investment Company (SBIC) and now, after an IPO and subsequent rounds, Andy is buying up finance companies.  Within just three generations, this family business will have become a billion dollar business!

Medallion Financial has become a large SBIC quickly because they were already  making loans to immigrants and minorities to buy their taxi's medallion.  Andy is doing exactly what his grandfather suggested: "Stick to your niche and you'll get rich."


National Association

You can find an SBIC near you.   Listings are within the website of the Small Business Investor Alliance.

Medallion Financial Corp.

Andy Murstein, CEO

437 Madison Avenue
New York, NY 10022
212-328-2100

Visit our web site: http://medallionfinancial.com/

Office: 212-328-2100

Business Classification:
Financial Services

Year Founded: 1937

Step Aside For New Leadership

HATTIE: (In the studio) That was Andy in 1996. Next, you'll see that he is achieving his big goal and getting very close to the billion dollar portfolio. Most family businesses don't make it past the first generation, usually because the founder doesn't or won't stop to teach or make room for new blood. With the second and third generation still working side-by-side in a respectful relationship, we predict shareholders will continue to see their investment in Medallion Financial grow. (Voiceover) If you'd like to know more about what you've seen on this broadcast, go to Small Business School.org.

ANDY: Three o'clock is good. If he is there I'll stop by then.

HATTIE: (Voiceover) Naturally, Andy uses a cab to get around New York and this is a very special one.

ANDY: It's a 1977 Checker. It has a one million miles on it. And they don't make them like they used to any more. You know the cab drivers these days are just as good as they were 50 years ago, but unfortunately the cabs are not. The Checker taxis, you have plenty of legroom, it's very comfortable. These days the cabs are kind of a tight squeeze. We usually use it when we're taking customers around to different locations, if we want to entertain somebody in the advertising business.

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