Today is the first day of July (my favorite month of the whole year) and Summer is in full swing. When I think of Summer I think of swimming pools, barbeques, watermelon, long days, and baseball among other things. If you are follower of baseball or business news then you have probably heard about the problems the owners of the Los Angeles Dodgers are experiencing. A recent posting from Entrepreneur gives some insight on three lessons small business owners can learn from the situation.
- Keep personal and business finances separate.
- Understand the power of a franchisor.
- Don’t overstaff.
The McCourt family is a text book example of the first point since the article points out that:
“Between 2004 and 2009, the McCourt family is said to have taken $108 million in personal distributions from the team to help fund personal mortgages and real estate.”
Overstaffing is also pretty obvious and should be taken to heart by any small business owner. What really struck me though, was the point on franchise agreements. In the Dodgers case, a $3 billion dollar TV deal between the Dodgers and Fox was blocked by Major League Baseball Commissioner Bud Selig. The article stresses that a very careful reading of any franchise agreement is essential for any potential business owner, a fact that the owners of the Los Angeles Dodgers learned the hard way.