How to Buy your Parents Business – Buyout vs Exit Strategy?
You may have never had to ponder how to buy your parent's business if your parents decided on an exit strategy. As long as they hold power, they can create an exit strategy whereby you inherit the business when they retire. Though this would save you from the question – how to buy your parent's business, however, you would still have to work hard on being the new manager at takeover. This is often tough, especially if your parent's employees never got the chance to know you prior to your takeover. A takeover would require some good change management skills on your part.
Change management comes into picture even if you buy your parent's business because your style of management might be different from that of your parents (unless you consult your parents for every business decision). However, if you do takeover, most employees may subconsciously prepare for a change. If you takeover the business as per the exit strategy of your parents, the employees might not care as much about possible changes because they may be under the impression that you would walk in the footsteps of your parents. If you act differently, however, they may not be expecting the managerial change. This is where you need to gain their trust. One good way is to consult change management counselors.
If there is an exit strategy, the transition should be smooth. In this case, you should start working at the business weeks before you plan to takeover. During this period, try to take everyone into confidence so that no conflicts arise after the transition. People will then be ready for any changes in management, thereby making change management easier.
In the following section, let's check out how to buy your parent's business.