Pass the Turkey (and where’s my bleeping check) | Business Succession
by Paul Cronin COO, Successful Transition Planning Institute
My annual homage to Thanksgiving and the foibles of business succession in families, first published in 2011.
You might be wondering what Thanksgiving has to do with Business Succession, but let me explain further. I was at a local networking breakfast, and an advisor was sharing a story about a client whom he was advising on the sale of his business. The client had a family member in the business, and wanted him to take over the business, so the business would carry on, and so the owner could cut back his hours (and eventually retire). The advisors spent months working through the technical, legal and tax issues, the buyer (the family member) was cooperating; the seller was motivated, a deal looked to be in hand. Sounds good, right? Not so fast.
The advisor asked the owner if there was anyone else to consult with prior to scheduling a closing. The owner said his wife. So the advisor set a follow up meeting with the owner and his wife. The advisor explained the terms of the deal (requiring an earn-out). The wife was listening intently. She looked upset. The advisor asked if something was the matter, the wife promptly said: “let me get this straight, we are going to sell our business to (the buyer)?” “Yes”, the husband said. The wife said “how can you do this? You know I can’t stand (the buyer’s) wife?” Every Thanksgiving, I am going to saying, “please pass the gravy, but thinking ‘Where’s my (bleeping) check?’ – forget it, the deal is off.”
Needless to say, the owner and the advisor were aghast. Months of time, thousands of dollars in fees all to end up with a soon to be VERY unhappy buyer, a husband with a VERY upset wife, and no ready alternatives – OUCH.
The advisor learned that exit planning was a delicate and complicated matter, and that emotions often overrule the practical deal elements. That the basis of successfully transferring any family business must deal with the emotional needs of the owner AND his/her spouse on an equal basis with the financial, legal and technical issues.
Happy Thanksgiving – no check required…
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