Selling Your Business? Don't Forget to Tell the Family

Selling Your Business? Don’t Forget to Tell the Family

The decision to sell a business is not taken lightly. Aside from the financial complexities of the deal itself, there are many personal and emotional aspects to consider.

If, like most business owners and entrepreneurs, your business has been one of the cornerstones of your life for many years, deciding to make an exit will undoubtedly be seen as a big step on many levels by everyone in your close circle.

Like marriage, parenthood, moving house, divorce or bereavement, disposing of a business is one of life’s biggest and most stressful emotional watersheds. Depending on what kind of person you are, running a company might be your life’s work, your passion, your purpose and your raison’ d’être.

Perhaps you’ve had employees who have been loyal for decades, whose families have grown and prospered alongside yours. Perhaps you are viewed as a forerunner or pioneer in your field because of certain business practices or technical developments you’ve introduced. Perhaps being an active part of the business community has become central to your social position and self-image.

So, the first question to examine is your decision to move on.

Has it been driven by exhaustion, disruptive market forces, an unexpected offer, personal reasons, family issues or just the feeling that you’ve travelled as far as you can on this particular road?

Maybe a simpler and less stressful life beckons, while the temptation of your golf clubs, bicycle or fishing tackle have become increasingly irresistible.

In our experience, explaining the reasons and consequences of exiting your business to those closest to you is as important as the structure of the deal itself.

First, be certain that this isn’t a passing phase. Then have your reason (or reasons) clear in your own mind before you inform your business and social partners about your decision. In the future you will adopt a different mantle, you are likely to change and this could have profound implications on their lives, too.

They may be more reluctant than you realise to say goodbye to a venture that has always provided them with status and a comfortable living or upbringing. Aside from the obvious tax considerations, there will almost certainly be family concerns about the way the proceeds of the transaction will be used, distributed or allocated.

Will the resulting wealth be organised in such a way as to produce continued family income, growth in the ‘family’ fortune or will you be embarking on another venture with its own associated risks?

In the frantic and time-consuming period when the deal is in progress, it’s easy to overlook your family’s concerns. They can easily feel hurt and sidelined.

Talk to them. Tell them why you’ve chosen this course. Explain how it will affect them. Make it clear that you’ve included them in your plans or why you haven’t. Remind yourself and them that there will be life after the deal and you’ll be expecting to live it and share it with them.

When the deal is done, the dust has settled, and the corporate advisors have disappeared into the distance, you will probably breath a huge sigh of relief. With your money in the bank, you’ll be thinking that a long holiday is overdue and that your stresses are behind you.

This may not be strictly true.

Again, experience has taught us that an exit is not so much about shedding responsibilities and entering a new state of tranquillity and ease. It’s actually about taking the next steps on life’s journey and about having an open mind because …

You may become totally bored with sun, golf, travel and leisure after a few weeks, months or years. You may feel that the undoubted talents that brought you success are being wasted and you are itching to get back in harness with a new venture.

You may want to become a business consultant or take up some non-executive roles in other businesses.

You may want to become a charitable donor or set up a trust for your grandchildren.

You may want to buy a race horse or develop property.

You may want to chase a brilliant proposition or opportunity that’s put to you.

With all these possibilities open to you, it makes sense to have someone you can trust implicitly looking after your hard-earned cash while you consider your options.

That’s where Clarion could be useful.

We’ve been through this movie scores of times with dozens of other businesspeople who were all convinced they knew exactly what they were going to do after selling their business – only to discover, their new life wasn’t quite what they expected.

We will hazard a guess that after a period of living your new leisurely life, you might also want to re-visit the subject of what you really want to do next.

The beauty of having us help manage your post-exit affairs is that we will put your wealth to work while you decide. You’ll retain the flexibility to do whatever you choose with your money. Nothing – and we mean nothing – will surprise us.