At the same time, I have experienced just as much angst simply because of the emotions which swirl around virtually every decision where people are involved.
Rationality seems to fly out of the window, feelings run high, decisions are made and not communicated, cliques form while in the end the family would probably come together to defend any attack.
There is, of course, no ideal route to any solution. All family businesses are different and the problems are different. The only real link is the emotional component which doesn’t necessarily apply in other businesses.
However, the SME sector has one issue which is common to most owner managed and family companies and that is succession. Perhaps the owner founded the company and has run it successfully (or otherwise) over a number of years.
Sadly, immortality is not an option and at some time the brutal fact must be faced. Something needs to be done about the business when he or she decides or has to retire.
The options are many and varied. For example, appoint a Managing Director from outside with some shares or options, then sell the business to him or her after a suitable time. Alternatively a trade sale or a straight forward MBO could be considered.
In the end, the question will be, how easy is it for the owner to exit the business? For how long, in a trade sale, would he/she be expected to stay on? Would they want to stay on?
It is often a painful experience to leave a business which has been part of one’s life for years, to leave the people, and to have to readjust to the fact that we are no longer involved and other people are running the business.
While staying on is a viable option in certain cases, experience shows that it doesn’t often last and the original owner begins to realise that working for somebody else is not always a very enjoyable experience.
And of course emotion comes into it yet again. I recall one of my Vistage members negotiating to sell his business to a multi-national corporate for a substantial sum, and they wanted him to stay on for two years to run the business and to assist in succession.
He had started the business with his father and he said to me:
“They want to adopt my baby and then to stay on to wipe its bottom”
The most important criterion is to keep looking at exit routes over a period of time and go for the one for which one feels most comfortable and which shows an acceptable return – not perhaps the maximum but the optimum.
It is a tough decision but it must eventually be faced and it is far better to be well prepared than to have it thrust upon us.