The Next Step: Are You Ready to Give It Up?
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Leaving the business you’ve built can be difficult. Whether your focus is on your legacy or liquidity, you need to be realistic about what an exit from the business involves.
Even in a situation where you bring in a minority investor, that means someone else now has a seat at the table and is influencing the direction of the company. It’s something Patrick Gaughan, President of Arro, a Hodgkins, Illinois-based food manufacturer is currently wrestling with.
“Is a business owner who owns 100 percent of the business ready to take on a majority or minority partner?” Gaughan says. “It all sounds good, but can you teach that old dog new tricks? How do you know this partner is the right one for you? Over the last two or three years, I’ve been meeting with private equity firms and family offices, just to develop relationships to figure out if I would like to be in business with these people. Would I like them to be my boss if they’re a majority shareholder?”
Not just business
Of course, there are personal considerations as well. What does retirement look like for you? Are you ready for a complete break from running the business? Or would serving in an advisory role ease the transition?
That's why discussing these issues with other business owners who have been through the process can be valuable. Additionally, an independent board of advisers can help you assemble a deep bench that’s prepared to take over the business, guide your strategy to put the business in a strong position for the next generation, and develop a comprehensive succession plan.
Planning your exit requires combining an emotional decision with educated, thoughtful actions. It’s about making smart decisions to ensure that you’re prepared to handle both the financial and personal implications of taking that next step.
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Henry Munez
Head of Specialty Markets, BMO Commercial Banking
Henry Munez is Group Head of BMO Harris Commercial Bank and oversees its Specialty Markets business, which includes the Food, Consumer & Agribusiness, Fran…(..)
View Full Profile >Leaving the business you’ve built can be difficult. Whether your focus is on your legacy or liquidity, you need to be realistic about what an exit from the business involves.
Even in a situation where you bring in a minority investor, that means someone else now has a seat at the table and is influencing the direction of the company. It’s something Patrick Gaughan, President of Arro, a Hodgkins, Illinois-based food manufacturer is currently wrestling with.
“Is a business owner who owns 100 percent of the business ready to take on a majority or minority partner?” Gaughan says. “It all sounds good, but can you teach that old dog new tricks? How do you know this partner is the right one for you? Over the last two or three years, I’ve been meeting with private equity firms and family offices, just to develop relationships to figure out if I would like to be in business with these people. Would I like them to be my boss if they’re a majority shareholder?”
Not just business
Of course, there are personal considerations as well. What does retirement look like for you? Are you ready for a complete break from running the business? Or would serving in an advisory role ease the transition?
That's why discussing these issues with other business owners who have been through the process can be valuable. Additionally, an independent board of advisers can help you assemble a deep bench that’s prepared to take over the business, guide your strategy to put the business in a strong position for the next generation, and develop a comprehensive succession plan.
Planning your exit requires combining an emotional decision with educated, thoughtful actions. It’s about making smart decisions to ensure that you’re prepared to handle both the financial and personal implications of taking that next step.
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