Family feud: How a buy-sell agreement can save your family business | BedTimes

How many ways can a family business get into trouble? Maybe an infinite number, if the stories told by family business consultants are any guide.

“In a non-family business you have rational problems and rational solutions,” says Don Schwerzler, an Atlanta-based family business counselor. “But in a family business you have rational problems and emotional solutions. Decisions are made not necessarily on what’s best for the business but what’s best for the family. That makes things difficult.”

The resulting disruptions can be costly. Schwerzler offered three illustrative scenarios that recently crossed his desk:

◊ When one family member got a divorce, half of his stock went to an ex-spouse with no business experience. To avoid a destructive addition to the management team, the business had to buy out the ex-spouse—at a significantly higher price than the stock’s value.

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