March 12, 2024— Long-term financial planning considerations, family legacy concerns, income and estate tax ramifications, transaction structuring, community and workforce impact, legal documentation, along with the reality—and finality—of “letting go” typically make a business transition one of the most difficult things a business owner will ever do. Listen as Stuart Smith III, national director of Business Value Strategies for Wilmington Trust’s Emerald Family Office & Advisory®, discusses how a business owner may successfully navigate the final stages of a business transition.
The Hard Work of Business Transition: The Best Way Out is Always Through
Hi, thank you for tuning into today’s Emerald GEM, which stands for Get Educated in Minutes. I’m Stuart Smith, national director of Business Value Strategies for Wilmington Trust’s Emerald Family Office and Advisory and your host for today’s podcast. In today’s GEM, I’m going to answer the question: How does a business owner successfully navigate the final stages of a business transition?
Transitions are hard. Political transitions, relationship transitions, and especially business transitions.
Long-term financial planning considerations, family legacy concerns, income and estate tax ramifications, transaction structuring, community and workforce impact, legal documentation, along with the reality—and finality—of “letting go” typically make a business transition one of the most difficult things a business owner will ever do.
While the final goal is important, acknowledging and accepting that “hard work matters” is an essential first step. Wise business owners recognize that a successful transition is a journey, not a one-time event.
That wisdom was eloquently—and perhaps surprisingly—taught to me by the life and work of the famous poet Robert Frost. After pursuing his true passion in quiet anonymity for many years, Frost published his first poetry collection at age 39.
Frost’s previous 15 years had been a grind, as he unsuccessfully tried his hand at farming before becoming a high school English teacher. His initial foray into publishing was no sure thing – there’s never been a lot of money in poetry. Fortunately, he achieved critical success and went on to worldwide fame while claiming four Pulitzer Prizes, 31 Nobel Prize nominations, and a Congressional Gold Medal.
Frost’s string of triumphs was preceded by significant struggles, but he kept going – a theme captured perfectly in his 1914 poem, “A Servant to Servants.” In the poem, a New England farmer’s wife reflects on the challenges of an isolated life, unappreciated work, and dim hopes for any positive change before noting that “the best way out is always through.” She knew the value of going forward.
After 30 years of advising business owners, I can confidently say that the farmer’s wife was right. Hard work, perseverance, and facing challenges versus avoiding them are hallmarks of success in any endeavor. Business owners who are serious about optimizing their transitions live out Frost’s sentiment through these important truths:
Maximizing and realizing business value is an arduous trek that can yield tremendous satisfactions for those who stay the course – a premise that Robert Frost would heartily support. As he neared the end of his life, one of his final honors was offering a poem at the inauguration of John F. Kennedy. On that bitter cold Washington day, 86-year-old Frost couldn’t read his intended poem because of the bright sun in his eyes. He carried on and recited a poem from memory. He was prepared and prevailed in a crowning moment. Much like business owners can when they set their minds to following through on all the steps – sometimes through great distractions – in their business journeys.
Early in his administration, Kennedy directed each branch of the US military to expand its unconventional warfare capabilities. The Navy responded by establishing the first SEAL teams. Throughout their storied history, Navy SEALs have epitomized “going through.”
One of their greatest commanders, Admiral William McRaven, gave University of Texas graduates a glimpse into the SEAL ethos during a commencement speech that included 10 life lessons drawn from his long service. Lesson #1 recounted daily inspections to ensure that each candidate had properly made his bed. The young ensign McRaven initially questioned the focus on such a mundane task, but he realized something over the ensuing years that rings true for any owner when they contemplate the full arc of their business journey:
If you can’t do the little things right, you will never do the big things right.
McRaven learned one of Frost’s life lessons. Transitioning business owners could remember the same and not be afraid, as Frost reminds them to take the “road less travelled by …” which can make “all the difference.”
Thanks again for joining us today. Please contact your Wilmington Trust advisor if you have any questions about the hard work of business transition. We would be glad to help you. See you next time!
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