As family business advisors there are a number of questions frequently asked. To assist you in understanding the work we do, I will be publishing a series of frequently asked questions.
I want to retire but neither of my children are interested in the business. What choices are available?
There are a number of options available to you depending on whether you want to keep the family business or exit and explore other opportunities.
- Management buy-out
- Management buy-in
- Sale of the business
- Generational transfer
Be open to your family about your wish to exit. Sometimes owners assume their children are not interested in the business. However, it’s too late when the business has been sold if the next generation tells you they would have liked to continue in the family business.
It’s important you have the right structures in place to ensure you, as an owner, receive the business’s profits. Where the family wants to sell the business and invest the funds in passive investments, ensure your business is sale-ready so you can achieve the optimal price for your business.
Management buy out or buy in are also options, particularly where you have loyal, long-term and capable employees. If you already have a capable manager running the business, ensure their remuneration package encourages them to put your business first – employee share schemes are one option to consider. If you don’t currently have a suitable manager internally, we recommend you seek to recruit the best person for the job, who fits the business culturally and works well with you.
There are different strategies for each of these options and they all require planning to help you achieve your desired results.
If you would like to learn more or you have a question you would like answered, please do not hesitate to contact me on ktaylormartin@gmail.com