#140: Selling the Family Business: A Son’s Perspective

My guest today is John Garuti III. John spent the majority of his career in his family’s tile business. For anyone who has worked in a family business John’s story is all too familiar. He tells about his family dynamic during those years and why he finally asked his father to sale the company instead of taking it over himself.

The sale process took two years to complete. It was a tedious due diligence and heavy negotiation process. John describes what it was like work for the company after the sale and dealing with the resentment of the management. We discuss the pain of laying off long-time employees and adjusting a different company culture. Sometimes, the grass isn’t always greener on the other side.

John now works for a company called Digital Acquisitions, a boutique SaaS brokerage that specializes in digital businesses.

What you will learn:

• The history of John’s family business.
• How he got involved with the business full-time.
• The family dynamic that led to a lot of frustration for John.
• How John dealt with an uncooperative atmosphere.
• Why John finally decided to leave the company and ask his father to sell.
• The main problems the company had on the basic level.
• Why location is important in a sale.
• The headaches of due diligence.
• Why egos can delay a sale.
• The two-year selling process that led to employee relation issues.
• John’s earn-out deal.
• How the company changed and why John felt it was worse.
• How the relationship to his dad held out.
• When John knew he wasn’t staying on with the new owners.
• What he would have done differently.
• John’s reflections on the situation in hindsight.
• What John is doing now for Digital Acquisitions.

Takeaways:

John’s story is completely relatable to anybody who has worked in a family business. The most important takeaway of his story is, make sure clear and direct expectations are set for anyone in the business, family or not. There needs to be a culture of accountability and a clear vision for the business. Also, keep your family business separate from the family estate so that they are not tied together and stressing the family dynamic.

Links and Resources:

GEXP Collaborative
John on LinkedIn
Digital Acquisitions

About John:

Growing up in Queens, New York within a small family business, John’s experience begins with 15 years of leadership which successfully ran a manufacturing plant. After experiencing the sale of his family’s business, he became hooked on the process of M&A. Combining this with a passion for digital marketing he found his calling as an online business broker. John is always thrilled to discuss ideas and strategize solutions with clients.