If you are the owner of a middle market A&D company, there comes a time for you to consider whether any of your children are prepared to take over your business as you have successfully been doing. It’s an easy decision if you have a son or daughter who wants to take over and is also well qualified to handle the reins. Or, if none of your children want to take over the company, it is also an easy decision. However, if you have a child who wants to take over the business but is not qualified to do so, then some difficult decisions and conversations must take place.
We have found that no later than when children are in their late 30’s, you will know if any of your children have the knowledge, leadership skills, and interest to take over your business. Middle market A&D is very competitive, highly technical, and demanding, thus it is in your best interests early-on to determine if you have a child ready to take over your role. If the answer is that you do not have a child who can succeed you, then it is best to tell them while they are still young so that they can plan their lives accordingly. The benefit of doing so means that family relationships remain positive while your children will be supportive of you selling your company in a normal business transaction.
Unfortunately, we have seen many cases where the owner has not determined early on whether a child can be ready or not and family relationships dramatically suffer while a sale process becomes unnecessarily disruptive. As we have many times discussed in our Deal Notes®, planning is key to a successful sale of your middle market aerospace and defense company.
Have a great day everyone,
Bill Alderman
Founding Partner
