Selling a business you’ve helped build up is always a tough decision, and it can become even more so in the case of family businesses. Family businesses have often been passed down from generation to generation, and may represent a major part of the family’s identity and important piece of history.
At Utah Business Consultants, we’re here to help any client with selling a business, including those considering whether or not now may be the right time to sell a family business. Let’s go over a few of the special factors you’ll want to consider in these cases, plus how to prepare yourself if you do decide to move forward with the sale.
Family Factors and Post-Sale Considerations
For starters, there are some relatively obvious reasons why selling a family business may be a tougher decision than normal. These businesses often hold meaning and importance to many family members, not just those controlling the business itself.
Some of the factors involved may be specific to your situation and how it will continue. Are there other family members who might be able to run the business without you? If not, is there a plan for those in the family who were involved with the business and how their work time will be spent following a potential sale? These conversations should involve all relevant family members and should factor in emotional stress that comes along with this process, which is a very real thing – some families think they want to sell, but realize once they get started that they just can’t go through with it.
Another key area to investigate is whether the market is right to sell at a given point in time. The best method here is to have one of our business brokers evaluate your business and its worth, then compare that to what the market is likely to pay. Speak to our team about learning more here.
Another area our brokers are highly helpful in is due diligence, including vetting prospective buyers and investigating their past business acquisitions. Families selling a business want to be sure their potential buyers will honor commitments and operate in an honest, trustworthy manner during the process, plus will take good care of the business once it changes hands.
Finally, if you’ve determined this is the prudent move to make, you want to be prepared for pending negotiations. Namely, it’s important to name an individual or small group within the family who will be in charge of overseeing negotiations and stating the family’s position – too many voices here can complicate the matter. And of course, we highly recommend utilizing the services of our business brokers, who have been through hundreds of such negotiations and know exactly what to prioritize.