Family Businesses and Legacies with Purdeep Sangha
Purdeep Sangha is an accomplished entrepreneur, speaker, podcaster, and strategist. He is also the award-winning author of The Complete Man, and the host of the Canadian TV show Mind Your Own Business.
Purdeep is an entrepreneur at heart, and he loves building businesses and providing value to clients or customers. He has a passion for real estate and is the co-founder of Business Brothers, where he and his brother help family businesses with growth and optimization, mergers and acquisitions, wealth advisory, and high-performance training.
ALL IN THE FAMILY
There are many strategic advantages to a family business that do not come with non-family businesses, such as:
- The ability to act quickly and be nimble in their decisions
- Having similar interests
- Having a high level of commitment
Despite these advantages, family businesses often struggle with certain challenges that non-family businesses do not face. For example, there can be complicated family dynamics, such as sibling rivalries or generational conflicts, that can spill over into the business and create tension and dysfunction. Family members may have different levels of expertise or experience, and this can lead to power struggles or disagreements over strategy and direction. Additionally, the emotional ties that come with being family can make it difficult to make objective decisions, especially when it comes to succession planning or exit strategies.
To overcome these challenges, it's important for family businesses to establish clear communication channels and boundaries, as well as develop a shared vision and set of values that guide decision-making. It can also be helpful to bring in outside advisors, such as consultants or lawyers, who can provide objective perspectives and help facilitate difficult conversations.
In terms of exits and M&A deals, family businesses may face unique challenges and opportunities. For example, there may be concerns about preserving the family legacy or ensuring that the business remains in the family. On the other hand, there may be pressure to sell the business for maximum value or to satisfy competing interests among family members.
To navigate these complexities, it's important for family businesses to engage in thoughtful and strategic planning well in advance of any potential deal. This may involve developing a succession plan or exploring alternative exit strategies, such as selling to a strategic buyer or going public. It's also important to involve all stakeholders, including family members, in the decision-making process and to be transparent and open about the potential risks and rewards of any deal.
BUYING A FAMILY BUSINESS
One of the main concerns that buyers have is the potential for family dynamics to negatively impact the business after the sale. Buyers may worry that family members who are not involved in the business may cause problems or create conflicts that could affect the company's performance. There may also be concerns about the ability of family members who are involved in the business to transition to new roles or leave the company altogether after the sale.
It is important for family businesses to have a clear plan in place before beginning the sale process. This plan should outline the roles and responsibilities of family members after the sale, as well as any expectations around their continued involvement in the business.
By developing a clear plan, addressing potential conflicts, and working closely with advisors, family businesses can help ensure a successful sale process that maximizes the value of the business for all stakeholders involved.
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For my full discussion with Purdeep Sangha, and more on the topic:
Listen to the Full DealQuest Podcast Episode Here
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FOR MORE ON PURDEEP SANGHA:
Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.
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