McBride for Business Blog

Updating Buy/Sell Part 5 Disagreement

May 31, 2017 // R. Shawn McBride // No Comments »

R. Shawn McBride recently spoke about updating buy/sell part 5, disagreement.

Hi, folks, it’s your friend Shawn here and checking in with you. Been working on a series of updating your buy-sell. And unfortunately from what I’ve seen in most businesses your buy-sells are probably out of date, right. Everybody’s got a buy-sell, maybe you didn’t even do one. But if you did do one, what I find is most times when it comes time to look at a buy-sell, it’s probably not effective, and it probably doesn’t do what you want to do.
So we’ve been talking about updating your buy-sell. If you’ve missed a prior video check them up on my youtube channel from McBride for business or the R. Shawn McBride public page where you’ll find this video. Check it out, take a look at the earlier series.
We started with talking about why buy-sells often get out of date. And the problem is when we need them, we need them to be effective, we need them to work. Or else everybody’s going to be upset and we’re not going to get the kind of outcome we want. So what we’re talking about today, is in these buy-sells.
We talked about death earlier and we talked about disability. Now you need to talk about disagreement, and this is something that people don’t want to deal with. They don’t want to deal with the fact that disagreement is a possibility. And disagreement can happen for a lot of reasons among business owners. It’s very real.
The biggest thing I find is life changes. People come into their companies with the purest of intentions. They want a company that’s going to last forever. They want a company that’s going to stands the test of time. And they’re okay with that, and they build towards that. But what we find is as time goes on they don’t keep the same values. Maybe one owner has some changes in life; they want more free time. Another owner really wants to build a business and it becomes a passion of theirs. And we end up in situations where we have two owners disagreeing. It’s almost inevitable that if a business stays together for a long period of time, that we are going to have a disagreement. Sometimes a disagreement is minor and doesn’t become a big deal. But sometimes it becomes fundamental. One business owner wants to sell and one business owner wants to work more hours. So we need to have provisions in the buy-sell agreement for a disagreement.
We want to understand what we are going to do if the owners start to go in different directions and how we are going to plan for that. How do we do this? We can build a lot of different provisions in there. But usually what it means is one owner is buying out the other or maybe we are selling to a third party. We want some way through that stalemate so that company needs to continue. We do not want to destroy that economic wealth. If we don’t put proper plans in place, often people end up in the courthouse. And that’s not a good place to be. So, we want to protect the economic wealth. We want to build that company and so we build disagreement provisions in there to allow a mechanism to get through a stalemate, keep the company moving forward and if necessary have the owners part ways. And it can look like a lot of different provisions. It could be a provision where one owner makes an offer to another. And that owner decides at that price whether they are a buyer or a seller. That’s a very popular provision. We could a have a third party evaluation; we could have a quasi-auction. There’s a lot of different ways we handle this but we need some path forward in the event of disagreement.
So, keep following our series here. We’re going to have more for you coming up. We’re going to deal with another situation. We’re also going to give an evaluation later in part of a seven part series. This is part five. And if you have any questions write me directly, R. Shawn McBride public page or check me out at McBride for business. Our blog has lots of great information for you. So stay tuned. After this kind of thing where you’re saying wow, you know I’m in a situation and I really wish I knew more about it. Talk to me, we can put together a workshop for you and similar business owners. Or I can work with you one on one and we can really get advanced on this stuff. So, if that the situation you’re seeing then please reach out. Shawn McBride, feel free to ring my office, 214-418-0258. Or comment on the video, send me personal messages. Let me know what you are dealing with and how we can help you with some better content in the future. Looking forward to keeping in touch.

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This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique. Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. Hans Gunther-Dreyer.

About the Author
R. Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment, gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can email R. Shawn McBride or call at (214) 418-0258.

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