Introduction
As I get older, the thought of what happens after an Owner transitions out of the family business seems to occupy more of my thinking. I question what kind of statement they might leave to future generations by the actions taken while building the company and toward the end of their time running the family business. I’ve written two very different scenarios from the perspective of how a Family Business Owner might be perceived by future generations of family.
Planning
At this stage in your business life it’s less about growing and running a company and more about succession planning, ebitda and enterprise value. You’ve likely hired professional services firms who specialize in coaching for business owners, a financial advisor or business coach, sale advisor, an expert in business value consulting, family business coaching and consulting, or a trusted business advisor.
In my thousands of conversations with 55+ year old business owners, eventually the discussion turns to legacy. You might think that legacy, like many things, tends to fall into the middle ground. However in my experience business owners seem to polarize one way or the other.
Now as you are going through this process of selling a business, taking the time to think about more personal issues seems the appropriate thing to do. What could be more personal than your legacy. You’ve spent decades creating your company and to many entrepreneurs your company is at the core of your wealth and integral to your legacy.
Legacy A – Something to be proud of.
Our parent/grandparent (your name here) was a successful business owner. They grew a tremendous business from nothing. All the while making sure family, staff, customers and suppliers were always well taken care of.
We all have fond memories of many experiences enjoyed with our parents/grandparents from holiday dinners to weekends at the cottage and incredible vacations to exotic destinations. They always made sure to be with us and to participate. Work was second to family.
Charity and good deeds were part of the fabric of the company and his/her life. Integrity was a basis for all negotiations, encounters and relationships. Working their way with internal and external resources are still referred to as the benchmark for how it is done best.
They planned ahead and when it was time to transition the company, all was in order. People and processes were in place. Accounting was thorough and up to date. Contracts in place. Strategies for the future growth of the business were established and being executed.
Regardless of who the company transitioned to, family (with or without their direct involvement), outside buyer or staff, the ship was well equipped and moving in the right direction. By the time the transition began, key management were trained and already excelling at their new responsibilities. It was a smooth and mostly
stress free experience. In a business transition there will always be something to upset someone.
As descendants, we are lucky to have the choices we do today. We are financially set and equipped to follow
in his/her footsteps in business and in life. To live life to its fullest, give generously and appreciate our good
fortune every day. We are the proud stewards of his/her legacy, and continue to live by their example.
Legacy B – Not sure you’d be proud of this.
Our parent/grandparent (your name here) was a successful business Owner. Loving what they did and ‘dying with their boots on’. They couldn’t see themselves living any other way and never took the steps necessary to transition the company properly. We talked to him/her about it all the time and nothing ever happened. Everything would be taken care of tomorrow.
As for memories, he/she was always working. Never had the time to take holidays. Family time was had grudgingly. Excuses were made by us as they loved what they did. Real memories of time spent with him/her are few and far between. They could have easily spent a week here and there with us but didn’t. Now it’s too late.
While we admire the passion, the series of events that happened after his/her sudden and unprepared for passing have devastated our family. Legal and financial frustrations tore our family apart.
The company revolved around him/her and no one was really trained to take over. Not family or other. The business started to falter the minute word got out that he/she was no longer running things. Customers got nervous, Vendors demanded quicker payments and staff began to panic. No leader, or at least no capable, prepared true leader could step up. The dream that the children would take over was a non starter as some of us were not interested and the others not qualified.
Competitors and Buyers began to circle the company like sharks smelling blood. Our surviving parent/grandparent didn’t know what to do and chose to take the first offer that came along. Some of our family, who worked in the business and a few long time employees were immediately let go.
The cash received was nowhere near what our parent/grandparent had assured the surviving spouse would have to live on. Fortunately our family rallied and are taking care of him/her as family should. But it has been an unbelievable strain on everyone. It could have been avoided.
As for future generations sharing in the success of our family business, we have all recognized that while it would have been nice to have some financial assistance for our lives and to leave for future generations as part of our own legacy we do not always get what we expect. We will succeed on our own and ensure we don’t make the same mistakes as our parent/grandparent.
Conclusion
Congratulations on making it this far in this extensive guide. I truly appreciate your dedication to learning about Leaving a Great Legacy to My Grandchildren. Your suggestions will be taken into account to ensure that this guide is continually improved
Remember, as the Owner of a Family Business, it’s up to you to write the story.
Are you asking yourself how long does it take to sell a business? Or should I sell my business? What are the steps to selling a business and how much do I sell my business for? What is EBITDA and EBITDA margin? Do I need a business value consulting professional to calculate value of a company? If you’re looking for tips for selling a business and increasing your customer base, from someone who specializes in family business coaching and consulting, you’ve come to the right blog.
As a trusted business advisor and sale advisor providing sell side advisory services I appreciate the opportunity to share my years of experience working with Owners just like you who have demonstrated their entrepreneurial spirit for years. In fact you may want to consider our online program ‘Sell Your Business 4 More’.