Delta Business Services
Will Your Family Become Like the Hatfields and McCoys When
You Sell Your Business?
Selling a business is a difficult, complex, and frustrating
undertaking, as anyone who has run the selling gauntlet will tell you. The
process is rife with dangers lurking below a seemingly calm surface, just
waiting to rise to the top and kill the deal.
Pitfalls, most especially interference from intermediaries
such as attorneys, business brokers, and lenders, can toss monkey wrenches into
even the most well-designed exit plans, resulting in more headaches for the
seller.
One of the commonly overlooked situations with the potential
to wreck a sale is conflict within a seller’s family.
By doing a few simple things before you decide to sell your
successful business, you can avoid family feuding that will surely impede the
selling process and quite possibly cost you money as well.
Don’t keep secrets
Resist the temptation to leave your family out of the
equation. Don’t wait until the day
before the sale closes to mention that you’re leaving the business. Keeping it under wraps might seem to be a
great way to avoid problems, but in reality it usually only serves to create
more conflict, hurt feelings, and resentment.
Have a trusted
third party involved
Remember this is first and foremost a business. It’s important to take as many emotions out
of selling as possible so that you do not make mistakes that will wind up
costing you time and money. For this
reason, having someone outside your inner circle, such as an experienced
consultant, CPA, or business mentor can be crucial to your success.
Don’t make
assumptions
A big mistake I see business owners making is that they
assume certain things about their heirs which may or may not be true. Common
assumptions are that their kids are eager to run the business, that they want
to run the business but lack the necessary skills, or that they have no
interest at all in the business. The
best way to know for sure is to meet with your heirs and ask them.
Reconsider the “fairness”
issue
Many business owners throw out common sense in favor of
making things fair. Intellectually, most
of them are aware that life and business are often not fair. They tend to
ignore this truth, however, when their kids or grandkids come into the equation.
That’s why normally lucid-thinking
business owners will take up the fool’s errand of trying to make every aspect
of the sale fair to every member of the family.
Maybe these owners remember what used to happen when their
heirs were little kids, engaging in temper tantrums and meltdowns whenever
their childish notions of fairness and equity failed to be implemented. Perhaps they see this striving for fairness
as a path of least resistance.
Whatever your reasons for wanting to be fair, you must
understand that it might not be possible to achieve in your particular
situation. Having an exit plan in
place long before you need it and discussing this plan regularly with your family
will do wonders to help you avoid hurt feelings and misunderstandings.
If your heirs will be involved in running the business, try introducing
them gradually over a period of time.
That way employees (some of whom might be siblings or other relatives)
customers, and vendors can get used to the idea of working for or with the
future new owners. Even if your children
are young, it’s not too early to show them what you do on a daily basis and to
observe their interests, strengths, and weaknesses.
Whatever you do, be sure to keep your family in the loop
with regard to your future business plans; even if you think you want to work
until they carry you out.
