After years of dedication to building a family business and seeing it through countless ups and downs, an offer to buy the family business may be on the cards. While this may sound like a great opportunity, the family business and family must prepare themselves for life after the sale.
Deciding to sell a family business can feel like riding an emotional rollercoaster. Add in the expectation of an influx of newfound wealth, and one may find themselves facing an identity crisis.
Fortunately, you don’t need to go through this emotional journey alone. While some people may be unable to relate to your feelings of loss, only seeing your “golden ticket,” try to lean on friends and peers who have sold businesses of their own. They can offer advice and support. You may be surprised by how generous people can be with their time.
The first step in processing the sale of a business is to take a deep breath, decompress and do some serious reflecting. One may be tempted to splurge and start spending right away, but it’s important to pause, develop a plan to diversify and protect the wealth, and wait until you actually have the dollars in hand.
Once the family business owner has taken the time to process their emotions, they should consider how and when to share the news of the upcoming sale of the business with loved ones, friends and employees. More importantly, how does one help those close to them prepare for the impact of the news, in addition to the wealth?
That said, most definitely one should not wait until the sale has been publicly announced to tell those closest to themselves.
Define what’s next
Even when everyone who needs to know has been appropriately informed about the sale, there will still be numerous conversations that must take place. A good start would be to gather together those closest to the family business to discuss values and vision for the future.
Explore what it took to get the family business where it is, and celebrate those endeavours. Then set expectations for what a healthy lifestyle looks like going forward. In other words, enjoying the fruits of one’s labour need to be savoured but it is important not to lose oneself. Wealth can feel incredibly empty without a sense of purpose about who you are outside of the money.
Next up a governance plan that establishes how decisions will be made regarding the wealth. The inclusion of all generations who will have a voice and a stake in establishing the legacy is imperative at this stage.
What happens if the above conversations are not had? The consequences can be dire. Research has shown that when family wealth is lost, the cause is often not poor investments or financial planning but a lack of communication among family members and a failure to establish consistent values.
After all the hard work of helping to build a family business and achieving success and fortune from its sale, what a shame it is to squander that wealth, or for it to ruin family relationships. The good news is that this doesn’t have to be the fate. For those who take the time to process their emotions, communicate effectively and define values and legacy going forward, the wealth — and the impact of that wealth — can last.
(All factual and statistical information presented in this blog has been obtained from an extract of a blog from familybusinessmagazinepartners.com ) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt
At the Family Business Office we can offer you assistance in dealing with family business succession planning issues through incentives supporting advisory and mediation services. Contact us today on firstname.lastname@example.org.