After an unsolicited offer from a competitor, a family reflects on what they’ve built and the uncertain road ahead.

The majority of family-owned businesses have no formal succession plan or successor leaders in the wings. Equally troubling are the studies showing only 30% of family businesses surviving through the second generation.

Successful transitions are the result of early planning, ideally years before the change in ownership or control. Does this mean an unplanned transition is doomed to fail? In short, no. And, our case study outlines one example of a successful transition.

In our white paper, “An offer they can’t refuse”, the Taylor family receives an unsolicited offer from a competitor. The Taylors have no succession plan in place and their children are not in a position to take over the business. While the competitor’s offer is more welcome than “Vito Corleone’s” offer in the Godfather, the family is at a crossroads – do they keep or sell their business? As the title indicates, ultimately the offer to sell is too good to refuse.

After making the decision to sell, the Taylors turn to the first order of business: assembling their team of advisors, including specialists in the areas of communication and family dynamics. Since the Taylors want to gain the buy-in from both the family and management, these “coaches” will be key players in addressing all of the family’s human capital issues. 

With the most difficult part of the sales process behind them, the Taylors begin the financial analysis of the sale and retain an investment bank to develop a timeline and strategy for the sale. Ultimately, the sale proves to be a great success. Taylor Systems sells for a purchase price 30% higher than the original offer and the purchaser retains the management team – one of the most important factors for the Taylors.

Having sold the business, the Taylor family is now a financial wealth enterprise. This presents a new host of critical issues around taxes, estate planning, and management of the financial operation. Advisors and wealth coaches can help the family navigate this new territory and build the architecture to support it.

Finally, the Taylor family is ready to tackle the future. Sustaining wealth over time takes hard work, not just good financial sense. The Taylors decide to invest in an educational program that begins with history and values. Coaches may focus on communication skills and trust, while advisors illuminate the mysteries of estate plans, taxes and investments. If all goes well, the Taylors will enjoy the cannoli too.