Sometimes just selling the business is seen as the easy answer to succession, but often it is also the wrong answer. If you are considering selling your business then look at the implications from a net wealth, unity and legacy perspective.
The first step is to consider the net wealth implications. After selling the business and paying off all debts and obligations, what will be left and how may that be split across the families? Will this sum allow the families to meet their financial needs, especially if selling the business also closed out their employment opportunities?
The second consideration, selling off the family businesses and ultimately splitting the proceeds across family members is unlikely to stimulate family unity. And more likely will just facilitate each family going off in their own direction. Those families who are financially astute will likely do well and those which are not will likely lose their wealth. And then turn back to siblings and extended family for financial support.
While the business continues to trade it provides, hopefully, an income and career for family members. The value of being able to work within the business for a living should never be underestimated and it can also provide a glue that can connect immediate and wider family members.
The third consideration is the family legacy. Building a generational family business is not easy as you must nurture and groom the next generation of leaders and grow a business that is capable of being transitioned.
But great businesses are wonderful things and every business leader would like to create the legacy of a business that endures well beyond their time.
This is possibly the most valuable asset, tangible and intangible, that you can provide your family.
Active Knowledge Question:
Have you considered the impact of selling the family business well beyond just the immediate financial impact?
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All the best in the success of your business,
Richard Shrapnel
