A dear friend and former sorority sister recently made the difficult decision to sell her multinational consumer products company—a publicly traded, family-controlled enterprise. While it was a terrific financial transaction, she found it incredibly painful to let go of “her baby,” which was founded by her parents in the 1950s.
As the company expanded over the years, my diligent friend worked her way up to the top leadership position, and she loved every minute. Even during our college years, I can remember her involvement with the company’s marketing.
My friend’s children had chosen to pursue other career paths and did not want to join the family business, so her family decided to sell. For my friend, this was truly bittersweet. She had grown up discussing the business over the dinner table, worked there for more than 30 years and was extremely close to many of the employees.
“No matter what,” says Mariann Mihailidis, managing director of the Family Office Exchange, selling a business is “a time of significant change for the family.” After the transition, Mihailidis notes, the family realizes that they are in the new, often bewildering business of wealth management. "Education prior to the liquidity event is critical, and peer support afterward is very helpful,” Mihailidis says.
Some family business consultants say the transition is easier for everyone —the former owners, the new managers and the employees—if the family cuts the cord completely. However, Mihailidis says, “Entrepreneurs selling the business have a harder time with this and usually end up remaining with the company in a transitional position. When that period is over, they are happy to move on and start something new.”
I faced such a transition in 2001, when my father-in-law, my husband and I decided the timing was right to sell our chain of community newspapers to a large media conglomerate. This happened to be a very prescient move, since several years later, the market began to crumble for newspapers, and much of the traditional advertising migrated to the Internet.
However, our newspaper sale included “my baby”—Main Line Life, an award-winning suburban weekly that I helped to establish. Following the sale, I made the decision to stay on for four more years. I loved running the paper and had a fantastic group of employees, most of whom are still there today. In hindsight, this might not have been the wisest decision for me owing to my frustration at no longer being in total control. When I finally did leave, I happily headed to Family Business Magazine, where I have been helping the team expand its reach. When one door closes, another opens!