Author Topic: Already FI - but how do I quit the family business?  (Read 2797 times)

blueyonders

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Already FI - but how do I quit the family business?
« on: September 15, 2017, 08:22:40 AM »
Hi all, first time poster, long-time MMM reader.  Would appreciate people’s thoughts on my current dilemma, or advice if anyone has been through a similar situation.

I am technically already FI as my parents both died when I was 26, so I received an inheritance much earlier than I would have liked.  I also inherited the family business when they passed away, along with my sister.  I’m now 35, single, female, no dependants, northern England based.  She is married with kids so has more of a drain on her finances than I do, as well as a very unfortunately un-MMM-minded husband! 

We love the business with all our hearts but have both been feeling the increasing strain of running it in recent years.  Turnover is going down year on year as we just can’t compete with the internet companies and multi-nationals.  Customers are getting more and more rude and demanding, red tape, overheads and admin are all increasing and neither of us has been able to take a week off in over 5 years.  Coupled with this I’m feeling the frustration of being tied to a small rural town where there are limited social opportunities for people my age, difficult winters and plenty of negative attitudes.

In short, I feel like the time has come for me to vastly reduce my involvement in the business, if not exit entirely.  My goal is to travel around Europe for a few months or so to decompress, eventually maybe doing 6 months in the UK and 6 months abroad for a few years, renting my house out in-between and doing some of the many projects that I’d love to start. 

However, my sister is not in a position for early retirement, and won’t be for a long time.  I can’t just exit the business and leave her in the lurch but nor does she have the ability to take on my duties on her own.  Currently, we work very well together as she has the creative skills and I have the financial/admin skills.  Our one employee has her skill set and would not be interested in learning mine.  We would consider bringing him in on a partner level, but this wouldn’t solve the skills gap that my leaving would cause.

We could hire someone to take on all of my duties, but I know that I’d be worrying constantly about it if we did so.  The last two employees that we hired were caught stealing from us, so my trust levels are at an all-time low.  I also deal with most of my sister’s tax affairs, since our personal and business tax planning is interlinked, and neither of us feels comfortable handing that much information to an employee.  It would also always be in the back of my head that someone could quit for any reason with a week’s notice, leaving us without a key member of staff while I might be abroad.   

We could sell the business, but I think we’d struggle to find a buyer.  We could close the business, but I feel a great responsibility to my late parents to keep it going.  It would also leave my sister without a job and the business is useful for various tax planning purposes.  My sister could learn how to do my job herself, but she is not particularly financially minded, although she tries hard and has improved greatly over the last few years.  She simply would not have time to do my part of the job as well as hers though. 

So, I feel completely trapped and paralysed.  Work has turned into something that I struggle through daily instead of enjoy.  It’s now having a severe impact on my health as I've had a couple of run-ins with particularly awful customers over the last few years (through no fault of my own).  I am very non-confrontational in general but after one particular guy became physically violent I now get fight-or-flight shakes at even the slightest hint of an awkward customer.  I get anxiety attacks, very low mood periods, bad stress headaches and my blood pressure is way up, so changes need to be made urgently.

Obviously the business is the cause of the issues, but how on earth do I get out?  I’m finding it very difficult to find any helpful advice other than ‘just quit’ from people who don’t have family ties to their work, so whenever I sit down to come up with a plan I just end up hitting a roadblock.  Does anyone have any constructive advice, further reading recommendations or family business exit tips to share?

humbleMouse

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Re: Already FI - but how do I quit the family business?
« Reply #1 on: September 15, 2017, 08:50:46 AM »
It sounds like a compromise approach would work best.  Find someone who you can hire to deal with the customer facing things you are dealing with now.  Have them prepare an excel spreadsheet weekly/monthly with all the numbers you need to do the financial calculations. 

If you can train someone to do all your customer facing work and dealing with the assholes, you can still travel and take take care of some of the admin/logistical/financial work.  This way you can phase our your involvement and still get some traveling in, all while avoiding the shitty customers. 

Finallyunderstand

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Re: Already FI - but how do I quit the family business?
« Reply #2 on: September 15, 2017, 08:53:19 AM »
You need to do what is best for you and your health but also not leave your sister high and dry.  My thoughts are to give 6 months to 1 year notice to her about your intentions to leave.  Start talking about it now. This gives her plenty of time to try to figure out if she wants to keep the business going.  If she does then there is more time for you and her to find someone to train for your position. 

If you truly can't sell the business then it doesn't appear to have value outside of the income it provides you.  If you don't need the income you can walk away and give your half of the business to her so you have no negative consequences if it fails. 

You can't live your life trying to make your dead parents happy and also running the business so your sister can continue her non-frugal ways.  With the risk of sounding unsympathetic, your parents are dead.  They don't care.  If you had kids you would probably want them to be happy and not working a job they don't want. 

I worked in a family business and always got asked questions about it.  I left and do a 100% commission based job and I like the independence it has given me as well as my own identity.  Granted my parents are still alive but they like that I do my own thing and are proud of me. 

ooeei

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Re: Already FI - but how do I quit the family business?
« Reply #3 on: September 15, 2017, 10:02:29 AM »
It sounds like a compromise approach would work best.  Find someone who you can hire to deal with the customer facing things you are dealing with now.  Have them prepare an excel spreadsheet weekly/monthly with all the numbers you need to do the financial calculations. 

If you can train someone to do all your customer facing work and dealing with the assholes, you can still travel and take take care of some of the admin/logistical/financial work.  This way you can phase our your involvement and still get some traveling in, all while avoiding the shitty customers.

Yep, part time sounds like the way to go. Basically be a consultant for the stuff she has a really hard time doing.  There's no reason you can't still do the taxes from out of town, or review the books and help her out if she has a question.

You can probably hire an administrative assistant to do a lot of your current work on a per hour basis, and you do the complex financial stuff from wherever you choose. My girlfriend is a virtual admin assistant for a few small-medium companies, and let me tell you the companies that offer remote work can get a damn qualified person for a good price. She has a degree from a Big 12 university, years of experience in a large corporation, and is a champion organizer/assistant. She makes $15-20/hour for her services as a contractor. Many places offer $12. If you offer $20 you have your pick of the crème de la crème.

Be sure when you post this job to give the applicants a range of "sample" tasks to complete that are as close to real world as possible, that will help weed out the competition. For her last job she had 4 different levels of tasks over a week, each taking 2-4 hours before she got hired. They had around 300 applicants, I think about 50 of them did all the tasks, 5 did them to an acceptable level.


Sibley

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Re: Already FI - but how do I quit the family business?
« Reply #4 on: September 15, 2017, 12:28:58 PM »
It sounds like a compromise approach would work best.  Find someone who you can hire to deal with the customer facing things you are dealing with now.  Have them prepare an excel spreadsheet weekly/monthly with all the numbers you need to do the financial calculations. 

If you can train someone to do all your customer facing work and dealing with the assholes, you can still travel and take take care of some of the admin/logistical/financial work.  This way you can phase our your involvement and still get some traveling in, all while avoiding the shitty customers.

Yep, part time sounds like the way to go. Basically be a consultant for the stuff she has a really hard time doing.  There's no reason you can't still do the taxes from out of town, or review the books and help her out if she has a question.

You can probably hire an administrative assistant to do a lot of your current work on a per hour basis, and you do the complex financial stuff from wherever you choose. My girlfriend is a virtual admin assistant for a few small-medium companies, and let me tell you the companies that offer remote work can get a damn qualified person for a good price. She has a degree from a Big 12 university, years of experience in a large corporation, and is a champion organizer/assistant. She makes $15-20/hour for her services as a contractor. Many places offer $12. If you offer $20 you have your pick of the crème de la crème.

Be sure when you post this job to give the applicants a range of "sample" tasks to complete that are as close to real world as possible, that will help weed out the competition. For her last job she had 4 different levels of tasks over a week, each taking 2-4 hours before she got hired. They had around 300 applicants, I think about 50 of them did all the tasks, 5 did them to an acceptable level.

One caution: that's a lot of time to invest just to apply for a job. Honestly, if I job I was applying for asked for something like that, I'd think you were trying to cheat me. There's been various discussions about this at AskAManager.org, and it's a fine line to walk. Skills testing is fine, but gotta be careful about it.

Imma

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Re: Already FI - but how do I quit the family business?
« Reply #5 on: September 15, 2017, 01:02:37 PM »
I think you show good character by caring so much about your parents' legacy and your sister's financial wellbeing, but it's costing you a lot - not just your own independent life but also your health.

It sounds like you're a small company. I get that you don't want to outsource the tax / admin part, but is there any way you could do that remotely? I do the complete business and tax administration for a similarly small company in trade. It takes me about 15 hours a week and I could certainly do that remotely. If you don't want to deal with customers anymore, that sounds like something you could hire someone for. I'm not sure if your brother-in-law is involved already, but if you're stepping down, maybe he wants to step up and keep the business in the family?

Otherwise I think giving your share of the business to your sister (if you're FI and it's not sellable and you clearly care so much about her) might be quite a good idea. You could still do the complicated tax planning stuff on a per-hour basis. I can imagine it'll be a challenge to let go though.

Is your sister in any way aware of your feelings towards this business? If not, you should talk to her about your doubts asap. Who knows what kind of solutions she has in mind.

Proud Foot

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Re: Already FI - but how do I quit the family business?
« Reply #6 on: September 15, 2017, 01:26:49 PM »

We love the business with all our hearts but have both been feeling the increasing strain of running it in recent years.  Turnover is going down year on year as we just can’t compete with the internet companies and multi-nationals.  Customers are getting more and more rude and demanding, red tape, overheads and admin are all increasing and neither of us has been able to take a week off in over 5 years.  Coupled with this I’m feeling the frustration of being tied to a small rural town where there are limited social opportunities for people my age, difficult winters and plenty of negative attitudes.


This part really stuck out to me when I was reading your post. Increasing strain, decreasing sales, more competition, increasing overhead. Have the two of you talked about these things? I would say there is a chance your sister feels the same way about the business as you do. Be honest about the future of your company based upon the trends and then work on an exit strategy.  Figure out which way is the best for both of you. Whether that is to sell or close up shop. The last thing you want is to keep the business open so long you are forced to close and wind up with nothing or even carrying debt personally.

mozar

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Re: Already FI - but how do I quit the family business?
« Reply #7 on: September 15, 2017, 04:51:18 PM »
Consider looking into automation and internal controls. A lot of finance can be automated now and if you have good internal controls in place (segregation of duties ), employees won't have the option of stealing from you.

BTDretire

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Re: Already FI - but how do I quit the family business?
« Reply #8 on: September 16, 2017, 09:47:26 AM »
I wish I knew.
 My wife and I have a two person business. She does not want to retire.
 Our little business is open 70 hours a week 7 days aweek. (there are more after hrs work)
So, she is working a lot.
 I attempted to retire in Jan. and for three months that was fine, then the seasonal
upswing started and she needed help. I was working 20 to 25 hrs a week. Now business
is slowing down again and I'm working less.
 I think I have resigned myself to working about 13 hrs a week for 7 months a year
and 20 to 25 hrs for 5 months. She says 5 more years, not what I want.
 Because of the nature of the business, it's not easy to hire someone to work one hour here
and 3 hours there, like a hubby will.
 Good luck with your situation.
 

Frankies Girl

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Re: Already FI - but how do I quit the family business?
« Reply #9 on: September 16, 2017, 10:39:43 AM »
First off, your parents would not have wanted you to "keep the legacy going" at the cost of your well-being, unless they were very bad people who cared more about the business part than they did the family part. I would like to assume they were decent people, so it probably would sadden them to know you were feeling the need to keep running this despite it no longer being enjoyable for you and seeing it slowly start a downwards slide into difficulties and eventual closure due to failure to thrive. I can't imagine anyone wanting a family business to be run to the point of going bankrupt due to obsolescence of the business model - that the family has to go down with the ship as it were. If they loved you, they wouldn't want that for you. They likely would be proud of you both for being savvy enough to read the signs correctly and find a buyer and get out with a tidy little profit - the satisfaction of running the business well for as long as it was profitable, and then exiting gracefully.

The answers are there in your own post actually. Your sister could learn the parts you currently handle, she just prefers not to. If she wants the business though (because she wants to work for herself instead of finding a regular paid position), then she needs to suck it up and take over your roll. She could then make the current employee a partner doing what she used to do, and hire a part timer to cover the extra creative stuff the two of them can't handle. Hire a bookkeeper for the monthly money handling/tax time (after finding a good one through trusted sources) and the financials are then taken care of. Business can then run itself as long as it still remains viable and you're free.

But honestly, if the business itself is reaching the point of no longer being profitable or becoming more and more difficult to keep running, then you need to adjust your thinking - remove the emotional ties -  and find a logical point to exit.

Do research now regarding selling the business. If you haven't done specific inquiries, then you really have no idea what it is worth, who might be interested. You and your sister need to have a real talk as business partners - not as siblings - about long-range plans, the business's future (if there is one) and what you hope to both get out of it. And make sure to weigh your own wants and needs just as highly as your sister's - because right now, that is severely unbalanced even in your own mind. You give little weight to yourself and all of it to your family's legacy and sister's spending habits/wants.

It sounds as if you're stuck because you can't get over the fact that this was a family thing, and are tied up too tightly in family obligations and even supporting your sister's lifestyle. Things to ponder: What is she doing to support YOUR lifestyle; your hopes and dreams? Would your parents expect you to tie yourself to this business forever even if you hated it? What are you getting out of it now for yourself personally?

You are making the choice to stay in a place that you are unhappy with because of  your parents' choices and your sister's dependence on the business itself... when do you start listening to your own hopes and dreams? You've given the business over a decade of dedicated service. It is absolutely time if you so choose to move on and live your own life.




« Last Edit: September 16, 2017, 10:45:11 AM by Frankies Girl »

Retire-Canada

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Re: Already FI - but how do I quit the family business?
« Reply #10 on: September 16, 2017, 11:22:49 AM »
Sounds like you have to hire someone to take over from you despite the hassles/risks. That way you can take off and maybe come back once a quarter to do a review to make sure things are on track.

Kwill

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Re: Already FI - but how do I quit the family business?
« Reply #11 on: September 16, 2017, 01:48:17 PM »
I don't know much about British tax law, but if this were the States, I'd imagine it could be useful to talk to a lawyer about the tax planning issues you mentioned related to the business. At least start reading up about the issues.

It seems like there could be a lot of things tangled up in this -- the business operations, what the business owns, any logos or copyrights, reputation of the product, any debts, property . . . Could there be a way to sell part of it and simplify and/or outsource the rest? Like if it were cookies, you could maybe license others to make and sell your recipe under your brand or something.