Selling the family business – 3 tips

Selling a business that your family has owned, built, operated and loved, perhaps for generations, is obviously never an easy decision, but sometimes it’s the right one.

Maybe it’s become unsustainable for you to continue running it as you used to, maybe relatives you’d considered to be potential successors don’t want to continue the firm, whatever the reason, there will be an emotional edge to any sale of a family business.

Even if you’re just conducting a partial sale, going about the sale in a sensitive, careful and determined manner will help mitigate what could be a very hard transaction.

In this piece we outline three key tips to help make the sale of your family business as smooth and comfortable as possible.

1 – Sell at the right time

A beloved family business might feel like something you never want to let go of, but if selling is the right thing to do then it’s a process that you’re going to have to go through.

Firstly, don’t rush into selling it in an attempt to rip the plaster off and just get the deal done as swiftly as possible. Such overly-emotional thinking could severely impact the price you sell your business for and, further down the line, you could look back with regret on how little you got and how careless your sale was.

On the other hand, it’s important to not cling on too long in an attempt to find the “perfect” buyer (who may not exist), or just because you don’t feel you’re ready to sell. Hanging on to your business too long can make the process much harder and more unpleasant.

Not only this, waiting too long can impact your sale by exacerbating competitive or financial pressures you may have been under and, ultimately, putting you in a position where you are under much more pressure to sell and at a worse price.

When selling your business, be proactive, be professional and just approach it as you would any other transaction. The emotional stakes are higher, but such an approach will pay off.

2 – Get the right people around you

Getting the right advisers in place for the sale of your family business can really help with the process. Some advisers will have experience in family company sales and this can be invaluable in ensuring the process is handled both sensitively and professionally.

It is vital to choose the right advisers, both in terms of their professional experience and your personal feeling. Selling your family business will doubtless be a process that presents difficulties for you, therefore you will want someone who is sensitive to that.

Choose an adviser who you get on with well on a personal level, who understands, not only what your business is, but what it means to you. You want someone you trust to get the best sale possible and who will approach the matter with professionalism on all sides.

3 – Keep your family involved

While your family members may not be taking the business forward in future, they will still inevitably have some form of stake in it. Whether they work there, own shares, or simply have an emotional connection, it is important to keep them in the loop while you’re selling.

Throughout the process, your family will play an important part. That could mean helping out in decision making if they are involved with the company, or simply providing emotional support for you throughout the sale.

The sale of a family business will be emotional for all involved and, while there may be disappointment about it, a strong family unit will be vital.

Remember, a business is just a business, and your family will be there long after the sale is complete.