Family Business
Resources

Buying family members out of the business

Length

4 min

AppID

VIMEO-62095345

Description

Watch the Beaches, a fourth generation family who owns and operates Basin Harbour Club in Vermont, USA, explain some of the challenges encountered when transitioning the family business from 3rd to 4th generation. In a family business, there are many sacrifices and settlements that come with handing off the family business to the rising generation. Having a shared visions and values can help this transition be more agreeable for both generations.

Language

English
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Transcript

Robert Beach
My sisters and my brother and I, we operated as a family for a good many years. And they were trying times, as you can well imagine, having four people, and then as our children grow up, more people to make decisions on minor items.

Ann Penfield “Pennie” Beach
Having grown up with nine people in the business, you know, it was like a knock-down drag out to pick out waitress uniforms, and what brand of lawn mower you are going to get, and what the carpet is going to look like, I mean it just, you know, it is so much easier with two people.

Robert Beach
My generation, we were sailing along, and the kids were working here, and all of a sudden we realized that we were getting older. What were we going to do? And ... View More my brother and sister would have gladly sold the place.

Bob Beach Jr.
There was no plan for transition. My aunts and uncles had no succession plan. I think they thought they would work until they died.

Ann Penfield “Pennie” Beach
The older generation wanted to retire, but they got what they determined was an insulting offer to buy the property. A really close family friend, who is an attorney, said, “Well, why don’t you get an appraisal and see what the property is worth?” and it was worth exactly what they had been offered. They were horrified.

So this family friend and another individual in Burlington, Vermont said to us, “Well, why do we not put together a plan so you can buy the other members of the family out?” And there were nine family members. Our dad gifted us his stock, so we were able to find this angel who guaranteed our note to everybody.

Bob Beach Jr.
The process took about two years, and there were a lot of ups and downs along the way.

Ann Penfield “Pennie” Beach
It was a really annoying and frustrating process. My father’s sister and her two daughters were afraid that if they sold to us, they thought surely we had some ace up our sleeve, and we were going to make a bajillion dollars. They wanted to sell, they did not want to be part of the business anymore, but they did not want to sell to us. And my uncle and his son kind of talked them into it, basically.

Bob Beach Jr.
It is a series of give and take with the younger generation and the older generation, you know? Sometimes it is tough to pry the fingers open for the older generation. Doing the buy out with my family, some of our family members did not feel like Pennie and I could pull it off. So they, actually part of the deal going forward was that we had to hire a general manager for a year who would oversee the operation here at Basin Harbor. So he was here a year and then left, and we have succeeded since then.