Six questions to ask before taking over the family business

[multiplybyten]

My parents are taking a step back from the family business and I’m looking for people’s advice on taking over from them with an 18 month handover, what are the Pros & Cons.

One big element is that my wife works there and I would essentially become her boss, but wouldn’t directly be involved in her line of work.

Would be great to hear what people think.

 

[Mark T Jones]

My general advice is that the more closely attached you are emotionally, the more important it is to get details nailed down and ratified legally

Multi-general companies can do incredibly well, or can bring a nightmare.

One common problem is where the parents step back in title, but insist on involving themselves

The of course is the challenge of building credibility with staff, customers and suppliers - which will take time and commitment

 

[Annoying Donkey]

One big element is that my wife works there and I would essentially become her boss

HaHaHa... You think!

 

[The Byre]

One big element is that my wife works there and I would essentially become her boss, but wouldn’t directly be involved in her line of work.

Well, you are not going to become her boss any time soon! I know because I continue to work with my wife and we started working together 42 years ago. She has her areas of responsibility and I have mine and I interfere at my peril!

But the same goes for anyone else - I find people who are better than me at doing whatever it is that they are supposed to be doing and I let them get on with it. The only time I do interfere is when they fail to do something and come up with excuses - and if they keep that up long enough, we part ways!

Needless to say, my wife is the same and we both deliver!

 

[estwig]

A friend of mine took over a tiling contractor business from his dad a few years back.

The old boy was supposed to step right away from the business, leaving my mate to it, that didn't last long.

He's bored so he comes in the office everyday to help, my mate has to find him things to do to keep him out of the way. My mate is getting fed up of the endless....Why are you doing it like that questions!!

The old fella is becoming quite cantankerous in his old age, be careful!

 

[MOIC]

taking over from them with an 18 month handover,

Within that 18 months, you'll be able to see how the takeover transpires, especially the relationship with customers and suppliers.

Get legal contracts in place.

What industry is the business in?

 

[MBE2017]

I think Mark T Jones post early in this thread identified a major problem for many, and a very understandable one. After building a company up for so long, even if sold, the old owner tends to hang in there when it comes to family businesses. They are so emotionally invested they can find it hard to let the reins go. I know I would struggle in the same situation.

If you can steer clear of that minefield you will have a much better chance than many at thriving.

 

[Uwe (Invoiceberry)]

I've never taken over a family business, but my brother took over my dad's business. Or he's sort of in the process right now.

Traditionally with family businesses, this process takes quite a long time and involves the kid(s) taking roles in the company and slowly taking over control from the older generation. At least, that's what I have seen numerous times in my environment – whether it was construction businesses, winemakers or service-based businesses.

It also really depends on the size of the business, in my experience.

The emotional attachment the previous generation might have toward the business is something to look out for. If you come in and "radically" change something, that might be a minor change in your opinion but a seismic shift in the other person's view.

 

[Clinton]

Get legal contracts in place.

As MOIC says, but you need to do a lot more than get contracts in place.

It always amazes me when people come here for advice in these situations instead of paying for professional advice. Seriously! (Most OPs then come back with some bullsh*t to say that they do intend to instruct solictors etc but just wanted to get the forum's opinion first. Yeah, right!)

There are serious tax implications for the parents, the business, the new owner/s and various prep may need to be put in place.

That's not to mention the legal minefield, yikes!

Appoint good solicitors. Advise your parents to appoint their own solicitors.

Believe it or not, your wife is the least of your problems at this time (if such a situation can ever exist for anyone).

 

[MBE2017]

……. your wife is the least of your problems at this time (if such a situation can ever exist for anyone).

You obviously haven’t met many wives. Lol.

 

[Clinton]

I bow to your superior experience of other people's wives, @MBE2017.

Me, I don't even know who is a wife nowadays. I see two blokes walking hand in hand and I know one of them is the wife but I've no idea which one it is and I could get myself in serious trouble for taking a guess. Maybe they are both wives, for all I know! Anyway, like I said, my experience of wives is extremely limited.

 

[MBE2017]

I bow to your superior experience of other people's wives, @MBE2017.

I was young once, mistakes were made, but I never knowingly had experience of other peoples wives, it’s just a lot of women lie.

 

[HFE Signs]

I take my hat off to anyone who can become the boss of their wife

 

[m4hmo]

My parents are taking a step back from the family business and I’m looking for people’s advice on taking over from them with an 18 month handover, what are the Pros & Cons.

One big element is that my wife works there and I would essentially become her boss, but wouldn’t directly be involved in her line of work.

Would be great to hear what people think.

You're taking over the business, are you afraid to be your wife's boss? Wasn't this always inevitable? Why is it a big deal? Don't be scared. Lol

I have no problem telling a women what to do, but then I am nearly divorced as well.

 

[Carl Hague]

Depending on how the company would operate, you might nit be your wife's boss. You would be the company owner, think of her more as the General Manager who reports to you. What would your role be in the day to day running of things?

Ask her to show you how things are done, don't tell her how you want them done.

 

[m4hmo]

she sounds like a loose cannon to me