Why Won’t Bob Leave?

A Common Challenge Selling a Family Business

A Common Story:

Bob founded a successful manufacturing company and for the last 25 years has kept active and busy running the business.  For more than 4 years now, he has been talking about leaving – says he is ready for the next phase of life.  Unfortunately, he still hasn’t left, shows no sign of packing up soon and is rather annoyed when others bring it up or pressure him for a departure date.

A Common Problem:

Why won't Bob LeaveBob started the process and paperwork for both the sale of his business and his own departure.  He has been in conversations and meetings with experts who are managing the legal, financial and merger/acquisition (M & A) aspects of the transaction.  They have done the research, put together solid numbers and an easy platform to sell the business to a knowledgeable and qualified buyer.  In the last 6 weeks, Bob has gone quiet and won’t make decisions nor continue the actions to move the sale forward.  His professional team is frustrated, bewildered and unsure how to proceed.  They don’t know what to say to Bob or how to encourage him to follow through with the transaction.

A Common Solution:

Bob’s accountant called us in to work with this client.  The request: figure out what the problem is, find out what is getting in Bob’s way and help develop a remedy for this situation.  We started with an interview, which was very personal in nature, and uncovered what was beneath Bob’s stalling.  It appeared that Bob’s wife was pushing him to sell the business because he had promised to do so many years ago.  Bob could not visualize life without the business and was scared he would grow old quickly in his Lazy Boy recliner.  His wife was forcing the change and now that finalization of the sale was nearing, Bob withdrew from everyone and the process.

A Nice Ending:

It was evident that the personal issues behind the sale were barriers.  In order to work through these challenges, we came from three perspective:

  1. We asked Bob many questions about his personal needs and wants. The questions themselves were not difficult but Bob’s tendency was to answer most of them with “I don’t know”. We did not let Bob off the hook and guided him to do research and a little soul-searching to find definitive answers.  With Bob’s new clarity and insight, we created a transitional plan for Bob to gradually leave the business over 8-months and create a life outside of the business for the first 2 years.
  2. It was evident that Bob and his wife were on different pages and paths. They were married over 40 years and made the mistake of making assumptions about the other rather than having conversations; so it was necessary for each of them to create individual exit strategy plans. Once Bob had his plan defined, we brought them together to create a family plan that balanced individual, couple and family goals. It became very clear where the two of them intersected and when independence was needed. Bob and his wife could now focus on life and new adventures because Bob made a timely exit.
  3. It was difficult for Bob to wrap his head around not going to work every day. He could not envision “how” to leave his business – it was his baby.  After creating the transitional plan for Bob to exit, we put this information into a timeline, which punctuates tasks and measures. We put this information into a diagram that hangs in Bob’s office.  It made more sense to Bob when he could “see” how his gradual departure would unfold in a logical, stepwise manner.

Common Questions To Help:

We have a short set of questions to ask at the start of a business sale.  The answers to these questions help to decrease the probability of problems later when the seller goes silent and stalls the process.

If you are frustrated and confused because you have sellers who have gone silent and stalled the sale of the business, don’t wait for them to “come around”.  They won’t.  There is a good reason why they are resisting and chances are there are emotional or family dynamics at play. Check out our Exit Success Program and sign up for the template using the below form and don’t hesitate to contact us to come in, discover the issues and get them resolved so you can get back to the sale transaction. 604-349-8660, pam@strategytoexit.com

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