They learned that even good buy-sell agreements aren't enough to ensure a company's survival after a transfer of ownership.
Business owners who want to complete a smooth transition of ownership need to prepare properly, says Louis Plung, a partner with Louis Plung & Co., a downtown accounting and business consulting firm. That often means grooming successors well in advance of the ultimate succession.
"It's important that they develop an infrastructure below them," says Plung.
Making sure successors are introduced early to key business associates, such as vendors and customers, helps make the transition seamless, he says.
And what if you take over a business and find yourself cash-strapped, yet you need to recruit key personnel?
"If they don't have the dollars to do it, they might want to offer equity in the company," he says.
He notes that business owners, however, often are reluctant to cede any ownership.
"Too often, you find a mentality of, 'I want to hold onto as much of this as possible,'" says Plung.
He points out, however, that technology companies almost routinely offer ownership to key people, precisely because their ventures are opportunity-rich but cash poor.
Other options include offering noncash enticements, such as flexible scheduling, time off or the opportunity to work at home.
Says Plung, "They have to be inventive."