Thoughts on Exit Strategies for Family Businesses

I read an interesting article the other day, discussing exit strategies for family businesses.  This led me to the following thoughts...

An exit strategy for a family business can be a very tricky undertaking. Is it the best way to preserve wealth? Will it satisfy the wants, needs and desires of the younger generation? Will bringing in a professional manager to run the business be the best thing to do?

Many family businesses started out because the founder had an idea, worked for someone else and didn't like how the employer was running the business and wouldn't listen, or he/she couldn't hold a job. Thus the beginnings of a family business.

As the family business grew and prospered, members of the next generation were welcomed in the business. Some thrived, while others did not do so well. However, the family business kept growing.

At a certain point, the founder decides it’s time for him to go. This is because of health or he/she is smart enough to realize things have changed and the next generation is many times better equipped to handle the changes. 

But other times, the founder doesn't want to give up the reigns. “What will I do every day? I hate Florida.”

There are other instances where the next generation just isn't up to the task of “taking the business to the next level.”  There are Big Issues that must be addressed sooner rather than when it’s too late.

A family business can be looked at as a vehicle to provide a lifestyle for the entire family. If there are issues/problems that cannot be solved any other way, then a sale is a serious decision to be investigated carefully.

·         Will the business go on under the present circumstances?

·         Should we bring professional management?

·         Is the value of the business as such that the family can continue on in the present lifestyle without all the stress and tension?

All valid issues that must be addressed trying to keep the emotion out of it. Not an easy task.

I have had this experience, and my final decision was to sell. 

What will your decision be?