[goodJobWalrus]

In case the author is reading this, I am wondering why Dad did not have a succession plan, and was it ever discussed in the family what should happen after? What was dad’s plan?

[asanwal]

Hi - author here.

This is a big question tbh and the lack of a succession plan is a function of many things:

1. This was my dad's baby. He loved the engineering and the science of it and so the idea of retiring from it was difficult for him to conceive. Doing that also requires thinking about one's mortality which I also believe was difficult for him.

2. This was a small market business in a tier 2 city in India. Attracting talent that could take it over was challenging. And myself and my siblings having been born and brought up in the States and being utterly clueless about the engineering/science of the company made us a non-starter.

3. As others have pointed out, he was thinking about succession/exit because he knew it was required for the biz to live on and grow. But life unfortunately had other plans and he was taken away from us unexpectedly.

There are definitely lots of could haves, should haves, would haves, etc I've thought about afterwards, but this was clearly one of those "play the cards you're dealt" kind of situations.

Thanks for reading.

[999900000999]

Thanks for writing a great article.

I was honestly impressed with how much you cared for your employees.

The American way would be to just sell it to the highest bidder without any concern for anything else.

Does India have a different social contract? I'd never expect a company to actually look out for my best interest.

It seems like you really cared for your team. Are lifers common in India?

Back in my grandpa's time, you worked at the same place for 20 years, they gave you a gold watch, and then you retired.

Now your expected to jump ship often or your leaving money on the table.

[svat]

Thanks for sharing. Curious how things are now 6 years later: do you still keep in touch with some of the employees? Has the outcome been good for them?

[triyambakam]

I'm curious if you can share: how were you raised in the US while your father was in India? You were raised by a relative, or your mother lived away from your father?

[munificent]

> Attracting talent that could take it over was challenging.

Was promoting upwards from within not an option?

[noufalibrahim]

This was a great ride, a very gripping read and a very touching story. Congratulations on your adventure and I'm sure your father and his second family is proud of you.

[tootie]

This was a great read. You could sell this story to Netflix.

[jalapenos]

From reading it, and the various references to various potential buyers his father had already been in discussion with, it appears his plan was to sell it before that.

This is a big problem with these kinds of businesses. A lot of these solo owners who build up a business over the course of many decades serious underestimate how hard they are to sell, and have an unrealistic idea of what valuation they'll be able to get.

There is a whole industry of those bottom feeders the author referred to, who's business is precisely waiting for these sole owners to either die, or better yet become incapacitated to the extent they are forced to sell their businesses (but not so much that they can't hold a pen and read a sales contract), so that they can swoop in and offer them 2x or 3x - "what's your best alternative?".

[FredPret]

I'm not commenting on OP or their family business, but a multiple of 2x or 3x could be more than fair for a hands-on small business.

Consider that there are large public companies with established management systems that you can buy and hold, completely hands-off, for multiples of 5x - 10x. GM is trading at 5x, lots of banks are in that range, huge equipment rentals, mines, etc.

[lotsofpulp]

Why are the buyers referred to in derogatory terms? By the same logic, the seller should also be referred to in the same derogatory terms, for holding out for too high of a price.

Or one could do the sensible thing and leave emotion out of it, and realize business is just business. The market price is the price that results in a transaction.

[amadeuspagel]

If there's a whole industry of them, shouldn't there be lots of competition to buy these companies?

[daedrdev]

Yeah his father probably had been receiving lowball and unserious offers for years if one were to find the right email folder

[IshanMi]

The author mentions that his father was in touch with a PE-backed chemical company a month before he passed, who re-engaged a month after- sounds like that might have been his succession plan?

[jfdsaflkjv]

The Dad probably expected to live longer and run the business until then. Sounds like it was a big part of his identity.

Besides, most closely-held businesses don't have succession plans anyway.

[codegeek]

This was in India where succession planning for small business is non-existent and if kids don't pick up their family business, it's over. However, even in America, this situation exists for small businesses. With so many baby boomers retiring from businesses like HVAC etc, their kids don't necessarily want to continue the business.