There Are Only Four Ways To Transition Your Family Business
August 16, 2017
There are only four ways to transition your family business. Please listen as Wayne explains – and share your comments below.
Eric Ressler says:
Hi Wayne:
Thanks again. Very timely as you have provoked me to think again about our exit strategy. I am hoping that the family will be intimately involved in the business for the indefinite future. At the same time, it is shocking to hear that most family businesses can’t be sold to outsiders because the founders are too enmeshed. To quote this statistic seems to imply that most family businesses are never finally able to untangle family and business. Shouldn’t that be a part if not the primary objective of any exit strategy, to leave the business fully functioning as a standalone entity? A byproduct of this objective seems to be value maximization. Then, future family members enter the business if they are interested, based on reasonable compensation, if they are a fit, and because they believe they are called to serve. I hope I am not just dreaming!
Blessings from the great state of Georgia!
Eric
Wayne,
Wayne,
Good Blog. I agree with your thought process.
As we talk about “selling within” is an ESOP a viable method?
How about a blog on that?
Thanks
Kelly
It’s been my experience far too many business owners are ill prepared for succession. They do not have a firm understanding of the process. They do not have a accurate estimate of the market value of their business, and far too often they have not even identified a successor. In all but the rarest circumstances, liquidation should really be a last resort, but it may be the end result of failing to plan for a business owner’s exit.
Done a couple of acquisitions of like businesses. My experience is you bring the owner with the business, but after a few years he gets restless having to work for someone else and eventually leaves. Hard for them to integrate themselves into the culture of the purchasing business.
Eric Ressler says:
Hi Wayne:
Thanks again. Very timely as you have provoked me to think again about our exit strategy. I am hoping that the family will be intimately involved in the business for the indefinite future. At the same time, it is shocking to hear that most family businesses can’t be sold to outsiders because the founders are too enmeshed. To quote this statistic seems to imply that most family businesses are never finally able to untangle family and business. Shouldn’t that be a part if not the primary objective of any exit strategy, to leave the business fully functioning as a standalone entity? A byproduct of this objective seems to be value maximization. Then, future family members enter the business if they are interested, based on reasonable compensation, if they are a fit, and because they believe they are called to serve. I hope I am not just dreaming!
Blessings from the great state of Georgia!
Eric
Wayne Rivers says:
Thanks, Eric!
Kelly Hafeman says:
Wayne,
Wayne,
Good Blog. I agree with your thought process.
As we talk about “selling within” is an ESOP a viable method?
How about a blog on that?
Thanks
Kelly
Wayne Rivers says:
Consider it done, Kelly! Thanks.
Steve Drager says:
It’s been my experience far too many business owners are ill prepared for succession. They do not have a firm understanding of the process. They do not have a accurate estimate of the market value of their business, and far too often they have not even identified a successor. In all but the rarest circumstances, liquidation should really be a last resort, but it may be the end result of failing to plan for a business owner’s exit.
Wayne Rivers says:
Same observations here, Steve. DIY solutions don’t usually produce optimal outcomes.
Chip Greene says:
Done a couple of acquisitions of like businesses. My experience is you bring the owner with the business, but after a few years he gets restless having to work for someone else and eventually leaves. Hard for them to integrate themselves into the culture of the purchasing business.