When to sell a family business
The Importance of Preparing to Sell the Family Business - An Interview with Terry Monroe
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welcome to two questions a TV I'm Susan
Barrentine emo joining me today is
Tarrant Monroe he's the founder and
president of American business brokers
and advisors he's also the author of
this book selling with certainty
straightforward advice for cashing in on
the full value of your business hi Terry
welcome to the show thank you great to
be here I'm so glad to have you on the
show I'm so interested to talk to you
I am personally and professionally
intrigued with family business I grew up
in a family business I sold my shares in
a different family business now I own a
different family business and I've done
a fair amount of study in this area and
I'm just always so fascinated by the
fact that such a high percentage of
business owners don't have an exit or
succession plan why do you think that is
well I think it is Susan because I think
they all think they're gonna live
forever
men are more guilty of this and what I
think ladies are because we think we're
in visible we're gonna live forever so
we don't want to think about that stuff
that's it's just you know that's not on
the forefront of our mind at all
and what happens is you know things
happen in life which I cover in the book
and then all of a sudden you're the
light bulb comes on but generally I
think that's probably the big question
right here we try to avoid we're in
denial
yes well okay so I've noticed that with
family business owners they do tend to
wait too long to sell and the market
shifts or the value drops but the but
but sometimes they just wait and and
then it's a little difficult to sell so
how can we help
family business owners not wait so long
excellent question because that was the
whole idea the reason I read the book
was to help educate people on this and
not make the mistakes that I made and
all a lot of my clients of me yeah they
need to know that there are some
benchmarks and there's some reasons
there's a couple reasons if you're
healthy and you're thinking about
someday you're gonna sell it the
question I always get is when is the
best time to sell a business you need to
do but not what is doing bad when the
business is trending every year and it's
getting better and better and better
that's the best time sell when the
markets good what concerns me is what
happens is people will have a
significant life impact the event we all
have it's okay yeah but something will
happen and and I sort of said I tell
people I work in the deep business which
I don't really like doing it which is
death disease doors partnership
disillusion disruption I called the
dismal Dedes in the book yeah and that's
a little eyeball becomes on Susan says I
need to do something I need what do I do
who do I call and that's that
procrastination factor that's came into
play all that time yeah we can just get
them to look forward a little bit and I
always talk about if I could get a hold
of a family business you know two three
four years ahead of a time just have a
conversation I'm an advisor in that
manner just advice it so they know they
have a headline site so it's a it's so
funny because we've talked on this show
with with others who said this very
similar things like oh my gosh stop
waiting and it's I think it's hard for
them because so many business owners
that I talk to are like yeah I don't I
don't want to retire yet and I'm I'm
going okay look this isn't about
retiring this is about really insuring
because the reality is we're all gonna
die and you know nobody likes to think
about that but but at some point
something happens where you either
choose to not run your business anymore
or life chooses for you and none of us
knows when those things are gonna happen
and that makes it feel a little bit like
insurance where you're building an
insurance policy to preview but you
wouldn't you know if you said hey would
you like to risk your
your business if something happens to
you like no one would say sure it's
crazy it's crazy it totally is and
here's the thing even a business owner
needs to ask himself it's small family
business generally the largest thing and
what they're finding interesting you
know new at the bank and to fill out a
financial statement ok and you list how
much money you have in the bank if you
got any CDs if you got real estate yeah
and if there is this person they will
list value of their business ok
generally that is going to be the
largest one asset on the entire
financial state yet they don't treat it
with the respect they should know you
can insurance like you said herbs you
got insurance for your house if we house
friends now what happens if something
happens to your business they don't
think about it and all this is you did a
very good job explaining it's just
insurance
mm-hm know what's been the business will
be sold either by you your relatives
your heirs
somebody's gonna sell it one these days
but most people they're not oh they
think they're gonna live forever and
ever we're gonna come by yeah it's gonna
be a love fest well I like in the book
where you you I think have a really good
idea to practice selling the business by
taking a vacation and I really thought
that that was a really good idea because
it's you know and and I think about this
from from the perspective of being an
executive coach I think about ok you
have you're gonna have challenges as you
make this transition as you make the
decisions to let go the family business
you're going to have challenges as you
think about creating the next chapter of
your life they're gonna be some
emotional things that are gonna happen
and a lot of people aren't prepared for
that and I think practicing it by going
on a really nice vacation is a good idea
is that something you've put into
practice with your clients absolutely
when I interview my clients of course
they call me and I I thought when I got
in
businesses and I thought it would be all
numbers you know I'm good at having a
piece of cake and what I found how it
was just the opposite I am more of a
psychiatrist than I am a numbers person
because it's so emotional and the first
thing I ask them is what are you gonna
do actually sell the business and if
they go I don't know then I I start
talking to when I first started selling
businesses years ago I was down in
Florida and in Florida nobody thinks
that people have real lives down they
think everything is about the mouse oh
yeah and these would sell their
businesses or retire from up north and
he moved to Florida and after about six
months of living at home their wife
would tell him if you don't go get a job
or buy this is I'm gonna kill you
because and that's what I discovered
that they they didn't know what they
wanted to do and they thought that they
wanted to do this and so they went then
at that point they went and bought
themselves a job so I backed into this
yeah there's nothing wrong with buyers
no but I backed into it and then
interview guys and they said well if I
can get this price also that's not
that's not the right reason yeah what
are you gonna do well I'm gonna travel
I'm gonna do this
look what why don't you do a trial run
yep if you think you want to fish and
you want to travel take off for a month
and see if you get the heebie-jeebies or
you know you can handle it you test run
yeah you buy a pair of shoes you try
them out I mean this isn't rocket
science yeah well it isn't it isn't
right because when you're in it
sometimes you can't see like when you're
in the picture as a part of the picture
you can't see the frame and you can't
see what else is really in the picture
so I think I think I've always felt
there's a good case for coaching as a
partner in in selling the business
because so many people who sell their
businesses just really struggle with
that emotional piece and the the clarity
of what's their next step but I think
you summed up beautifully in the book
you know the book is
definitely a great read for people who
have a family business and are thinking
you know maybe at some point someday I
know there are a lot of people who just
want to work themselves into the grave
but at some point maybe you might like
to do something else or you know spend
time with your family or whatever so I
think the books are great but Terry
where can folks find you oh you can find
it at Amazon or Barnes & Noble or any
way where books are sold or you can go
to my website Terry Munroe comm it's on
there too
it's available do your point about that
Susan they they don't want to test that
out and try that you know what's going
on here
and you it's going to happen they're
going to women get out of business
eventually and my babies were they they
don't want to be blindsided that's why
I'm trying to bring good point so often
the people get blindsided there is a
process to this it's not like selling
your house or selling a car because what
I've sold so many things no there's a
business as a living breathing entity
it's like trying to get your hands right
Jill yeah changes every you know the
business that you have today is in the
business you had last year and it's not
gonna be next year yes so that's why
there's a process and people go there's
a process absolutely Jerry thank you so
much for being on the show today I've
really enjoyed it
Susan thank you for inviting me I really
enjoyed talking to you too okay viewers
here's the book if you own a family
business you need to get this book
whether you're thinking about selling
right now or not educate yourself
understand the process it's all in here
okay
we're gonna have links down below so you
can get your copy thanks for watching
we'll see you next time
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