July 1st, 2019
According to the Harvard Law Program on Negotiation there are three kinds of conflict in business and how to avoid them. These are:
Intercultural Conflict: Be Careful Not to Stereotype
Conflict with Friends and Family: Discuss Difficult Issues Up Front
Workplace Conflict: Test Your Assumptions and Choose a Role
This article will focus on exiting family businesses addressing both the family and the workplace conflict issues. Keep in mind the exit planning may involve selling to the next generation, to another buyer, going public, an Employees Stock Option Plan, or something else. To keep it simple the scenario that follows assumes a transition to a next generation family member.
Keep in mind there are a host of other issues too. For example, are the existing owners going to remain working, be advisors, be on a real board of directors, be on an advisory board, have employment contracts, covenants not to compete and a host of other issues. These issues go beyond the scope of this commentary.