Selling a business of any kind can be an emotional experience, but selling a family business is almost guaranteed to cause emotions to run high. Selling a generational company comes with managing family dynamics, considering the emotional impact of the sale, and determining what is best for you as a business owner. There are numerous pros and cons to consider, so let’s explore them.
Pros
- Pride and Achievement: While conflict is a distinct possibility, selling a business is also a monumental achievement that marks the close of a career chapter. Your family is just as likely to feel excited and proud over the announcement. This is the time to celebrate your accomplishments as a family!
- Relief: A family business can symbolize your family’s legacy; it can also represent a colossal responsibility for your children and grandchildren. Selling the company can bring an air of relief to your younger family members, as the expectation to take the reins of the family business goes away.
- New Opportunities: Running a business takes a lot of time and energy. Selling your family business allows you (and your family!) to pursue new opportunities and passions. Maybe it’s time to retire and spend more time with family and friends, or maybe it’s time to invest in a new career path. Regardless of what your future holds, selling your business will give you the time and funding to seek out these new opportunities.
Cons
- Emotional Attachment: It’s nearly impossible to build a business from the ground up without gaining an emotional attachment to it. Your family business represents years of hard work, financial investment, and dedication, and selling it may feel like you aren’t doing that effort justice.
- Mixed Feelings: Along with your own mixed feelings, your family members will likely have their own mixed emotions. Some family members may see selling the business as a positive achievement, while others may see it as a loss. Above all, it’s important to keep in mind what is best for you and your business.
- Potential Conflict: With all of this in mind, it’s easy to see how conflict could arise during the sale of a family business. Mixed emotions and a strong attachment to the business could spur conflict among your family. Talk things out with family and ensure transparency during your decision-making process.
Things to Consider
What Selling a Family Business Means for the Owner
Selling the family business often precedes retirement for the business owner, but that isn’t the case inherently. What is certain is that the owner is ready to step back on an operational and financial basis. Your employees and team members are likely to have their own concerns over their future. As the owner, you’re responsible for setting M&A objectives, building a team that can meet said objectives, and working to achieve them.
What Selling a Family Business Means for the Owner's Children
If your family is 100% in support of the sale, they may see the potential for new opportunities. Not everyone is going to be as invested in your business as you are. However, if your family is invested, they may fear for their now uncertain future. If your children assume they’re entitled to inherit your business, selling could feel like a betrayal.
What Selling a Family Business Means for the Business
Selling your business means cashing out on the culmination of your investment. It’s very common for business owners to want to wait to sell their business until they’re offered the ideal amount. However, waiting for the perfect time to sell your business may leave you holding on past peak sale time. Selling your business means you ensure your company won’t lose value over time.
Conclusion
Embarking on a mergers and acquisitions journey is never an easy task, but selling a family business is especially complex. It’s important to have a good team on your side during your M&A transaction. Contact Stony Hill Advisors today to speak to a team member about the sale of your family business.