Exiting a Family Business

September 14, 2016 00:46:59
Exiting a Family Business
Intentional Growth
Exiting a Family Business
/

Hosted By

Ryan Tansom

Show Notes

Exiting a family business can be very challenging – just what are the rules of engagement? How formal or informal should it be? How much should be based on good faith and trust?

Our guest this week, Kurt Theriault, managed to navigate through all of the moral dilemmas and come to an arrangement to buy out his father’s share of his business, only for the Great Recession to throw a huge wrench in the deal. There was eventually a happy ending, when a surprise offer came in that allowed them both to exit the business.

In one sense this is a cautionary tale about what can happen if you avoid tough conversations with your relatives and don’t value your business properly, in another sense it serves as a shining example of what can be achieved once you get your exit planning right.

How to sell a family business and how not to sell a family business: the moral of the story, with Kurt Theriault

In this week’s episode Kurt discusses the ups and the downs of exiting a family business, and how learning from the mistakes of negotiating with his father helped streamline the business to a point where it attracted a surprise takeover. See below for some of the highlights of the conversation:

Use multiple sources to value your business:

Kurt regrets only using one opinion. This process is especially important when dealing with family members inside the same business, i.e. if more than one party agrees on a valuation based on a wide range of factors, it is more likely to stand up to the rigors of negotiation and solidifying a deal.

Put a value on your intellectual property:

However many clients you may have, the real long-term value in the business is the unique nature of what you do. Clients can disappear overnight, especially when someone exits a business, so if it is possible to monetize the concepts that underpin your day-to-day business, then you should.

Create an advisory board:

This was a core building block for Kurt. Involving impartial 3rd parties in the valuation/streamlining of a business can be invaluable during the exit process.

Hire senior employees with their own client base before exit:

It’s vital to assure potential buyers that the business has a sustainable and profitable future after the owner leaves the business. This is a surefire way of doing just that.

Understand the value of business support groups:

This helped define Kurt’s entire future. It helped with his exit and it gave him his next venture.

How did he value the company?

He used one external source to name a price.

What motivated him to sell?

The value of the offer and the realization via his peer group that he could do fulfilling work outside of his current business.

What did he do afterwards?

He was offered an opportunity to be a partner in a peer group/support business for SEOs and business owners.

Wise words for the road:

“Business peer groups are vital. Everybody’s got blindspots that they can’t see… if you’ve got 12 or 13 people living in your shoes as an entrepreneur, they’ll help you”

“The hard part of being an entrepreneur is: where do you go to get your ideas?”

“Everyone should spend more time saying: what do I really want out of the business?”

Kurt’s peer group business:

www.alliedexecutives.com

 Contact Kurt:

[email protected]

952-484-0166

 

Other Episodes

Episode

April 28, 2021 01:04:03
Episode Cover

#246: What does it take for a company to survive for 100 years in the United States?

There are few clubs as elite as the Century Club, and today’s guest is going to share what it takes to get there. Vicki TenHaken focused her career on the factors that make companies long-lived and boiled them down to five key things Century Club companies do consistently: Have a clear sense of mission and strong culture Establish core competencies and key strengths Focus on relationships Retain long-term employees Support local communities Today’s episode will overview the most common things companies with longevity do, how you can establish these best practices in your own business and practical advice for encouraging a long-term company. If you’re serious about legacy, this isn’t an episode you want to miss!   What You Will Learn In Today's Podcast Interview Why Vicki spent 10 years on her research agenda to find the common practices of companies that are more than 100 years oldWhat participative management is and why you should consider taking it up The main characteristics of companies that make it to the Century Club Statistically significant practices that 100-year-old companies engage in, from Japan to the USA Why a clear sense of mission and a strong culture to go along with that made the top of the list Long-lasting companies take their time making changes and therefore change successfully The “soft stuff” really, really matters—relationships and managing them Companies that stick around see partners, not simply economic exchanges, in vendors, customers, etc. New product or service ideas can come from customers and suppliers you already have The value of employee-centric reward structures, including ESOPS Why it might be time to sponsor a little league team How being environmentally conscious could help your company last longer The importance of building curiosity into your culture What’s different for a family business wanting to maintain control through the generations   Are You Growing The Value of Your Business Take The 2-Minute ...

Listen

Episode

December 13, 2018 01:02:07
Episode Cover

#123: Why Your Reputation is Crucial in Your Exit

Mike Mooney, the author of Reputation Shift joins me today to discuss something that affects all of us. Reputation. We discuss how your reputation affects your business, your sale prospects, your future connections, and a ton of other things you don’t think about. Mike defines what reputation means to him and how you can be more aware of your own reputation. What you will learn: Mike’s background in the motorsports industry. The generational attitude toward reputation and the impact of social media. Mike’s definition of reputation. The 2 keys to reputation. The Reputation Equation. How to consciously build your reputation. The 3 steps to designing your reputation. How to be proactive in your reputation building. Why you need to manage your reputation yourself. Takeaways: As the leader of your company, you need to be mindful about how you treat people. Your business culture reflects on yours and your company’s reputation. Be positive, be authentic, and be proactive in creating a reputation you want. Links and Resources: GEXP Collaborative Mike on Instagram Mike on Twitter Mike on LinkedIn Mike’s website Reputation Shift: 5 High–Performance Truths for Success by Mike Mooney About Mike: He has developed a trusted reputation over the last 25 years at senior-leadership posts in the fast-paced and high-profile world of motorsports where he delivered dynamic business results and – more importantly to him – nurtured long-standing relationships. Having led numerous crisis and reputation management efforts over his career, Mike is a go-to resource for those in repair mode, but also those wanting proactive-branding and business-driving strategies. Mike’s experiences in motorsports led him to write the acclaimed book Reputation Shift – 5 High-Performance Truths for Success.  The book delivers actionable strategies and step-by-step ...

Listen

Episode

April 06, 2016 00:26:30
Episode Cover

Intro to the Life After Business Podcast

This episode’s purpose is to tee up the future of the Life After Business podcast and give you an understanding of why I am so passionate about business exit planning. I believe transitioning into a life after business is an extremely complicated emotional and intellectual journey. Very few entrepreneurs get a trial run, let alone a second chance, to sell their business. The lack of information out there leaves the business owner alone to figure out what they want, who can help them, and how to achieve it. When my Dad and I sold our company in early 2014 we did not have the guidance or awareness of the process I wish we had. We felt very alone and out of place. We could run a hell of a business but we had no idea how to even start with selling or transitioning it. We experienced many bumps and bruises along the way, both financially and emotionally. I want to bring you, the listener, as much information as I possibly can, the information I wish we would have had, so you can avoid what we experienced and increase your chances of a successful exit. What is a successful exit? I believe a successful business exit is one where the owner walks away happy. It is a smooth and comfortable transition into a life after business that is full of passion, purpose, and community. I believe the true definition of success is happiness. The best definition of happiness if have seen comes from Shawn Achor’s book: The ...

Listen