Selling The Family Business
The course has run, it has been filled with ups and downs. Now is the time to sell the family business. Why sell? I myriad of reasons from business conditions, to a lack of desire by the next generation. I have even seen where the family decides they don’t want their kids to be in the business and won’t sell it to them. Whatever your reason, there is preparation that is required.
Unless you are closing down the business (and even then) there is significant planning needed. Below are key topics to consider.
- Can the business run without you today? If you can’t take a one-month vacation without being essential to the operational aspect of the business, then you need to take the steps to empower and train the team to run the business without you. If that can’t happen then why would anyone want to buy a business that is tied to one person. You might be able to sell it, but not for the same value.
- Are there processes in place to ensure consistency of business operations? This isn’t bureaucracy this is consistency and good business is about consistency
- Have you determined when you want to sell? Depending on market conditions and the state of your business, it is at best usually a year from start to completion. Begin that plan now.
- Retirement: If the purpose of selling is retirement, do you know how much you need for what amount of time. Too many business plan for their business to be their retirement, yet haven’t defined what retirement will look like and what they need to make that life achievable.
- Would key team members be interested in buying? If so, that can make for a strategic process of them purchasing the business and allowing you to transition slower or faster depending on your preferences.
There are countless other considerations for selling the business. These are a few highlights. Call for a more in depth discussion of what it will take to sell your family business.