Business Brokers: Advice on How to Sell a Family Business

Be it for poor financial conditions, performance, or venturing into another opportunity, it can be hard to sell your business. But it can be especially stressful and overwhelming if it’s been in your family for generations. The process can be slightly confusing and complicated, so here are a few things to consider on how to sell your business.

Why are Families Selling Their Business

44% of business owners would consider putting their businesses up for sale if approached. 12% of them want to retain partial ownership because they do not want to associate themselves with the ownership perspective.

As parents realise that their children aren’t taking over, they stop investing which causes performance to decline. Many consider the fact that losing a business at the end of their working life would make them lose everything and leave them without the ability to recover. So, that’s when families have no choice but to transfer their ownership rights.

Key Considerations When Selling a Family Business

Before you start putting your business up for sale, here are things you should consider:

Knowing How Much You Want to Keep Earning

You need to be earning some profit or have an income stream, especially if you’re planning to retire. So, you can work with your accountant to decide if you should:

Sell it for a lump sum
Make a partial sale and continue to earn income
Remain connected as a paid consultant
Maintaining ownership of assets and leasing them for income

Making Sure Everyone is On board

How to Sell Your Business Key Considerations — Business woman making plans with somebody, shaking hands.

It is important to ensure that all family members are on board with the decision to sell your business, whether or not they are involved with it. Not only will it help make the entire process, but you can also avoid extra hassles and disputes that might turn into long legal battles.

You can appoint a third party to ease the emotional tension that might cause delays or divisions.

Assess the Worth Before You Sell Your Business

We know that family businesses have high sentimental attachments. But you should be practical and ensure that the worth is similar to the price the prospective buyers can offer. You can consult a professional broker to set the right value for your business and plan a strategic future exit. Remember, your company might lose some worth without the added value of being run by a family.

Finding the Right Buyer

Even though you might be relinquishing most of your rights as an owner, you can decide on the near-future trajectory of your business. Once you put up the advert, you will attract different types of buyers. Some may want to continue keeping it as a family-run business while some may choose to change it into a rental space or commercial property.

Deciding on your buyer preference early on can save you a lot of time when you start with the actual listing.

Business Broker’s Advice on How to Sell Your Family Business

You can decide to take on this job on your own or hire a professional broker. The former may be challenging but possible. Although, the latter would provide you with some leeway. If you’re unsure, you can check out Business Broker’s advice on how to sell your business.