Letting Go of a Family Business

Selling your business can be a huge change in your life, especially when you’ve been running that business with relatives or if it has been in your family for generations. Selling can be the right move for both your family and the business, but it’s important to consider the impact it will have on everyone. 

Is Selling Right for Your Family? 

The biggest difference when selling a family business is the impact that it can have on the relationships within your family. Many people feel strong emotional attachments to their family business, even if they aren’t personally involved in running it. 

The ties can be particularly strong for multigenerational businesses. Older generations can feel upset that the legacy they have passed on will be leaving the family, while younger ones may feel guilty about allowing the business to leave the family. It’s important to take these feelings into consideration and to involve the whole family in the decision to sell. Taking some time to talk or finding a way to commemorate the business will help. Try recording your memories or donating some of the proceeds to a charity in the family name. 

As well as the emotional implications, it is important to consider the practical and financial impacts on your family. Family members who work for the business may be staying on as employees, looking for new jobs, or considering buying out the business. It’s vital to keep everyone informed so they can make the right decisions about their own futures. 

Money can be the route of all evil

Money is always a sensitive issue but becomes more so when selling a family business. Suddenly, family who don’t work in the business can become very vocal and opinionated on value and deal structure.  

Its best to get professional advice on board.  A business broker will provide advice on value and deal structure. A solicitor will ensure that the proceeds are divided fairly to prevent future conflicts. So if you’ve not reviewed your articles of association or shareholder agreements recently, it will be worth taking a look.

The freedom of selling

Selling the family business can trigger conflict, but it can also be the best thing for you and your relatives. Aside from the financial windfall you might expect, selling can also be the right move if keeping the family business has become an obligation rather than a calling. 

If the family has changed in its ambitions, interests, or location, then there may not be anyone to carry on the business. Selling up could enable you to take on new challenges, which could actually be more in keeping with your family’s entrepreneurial spirit. 

Is Selling Right for Your Family Business? 

If the business has been in your family for generations then you may be worried how this break with tradition could affect the brand and your family’s legacy. You may also be concerned about your employees and customers, especially if you have built long-lasting relationships with them. 

Although its difficult to hand your family business over to someone else, it can be the best choice for the business. If so, a Management Buy Out (MBO) might be an option which is exactly what Excelsior Panelling Systems did. 

A growing business might need someone to come in with new skills or capital in order to take it to the next level. You might not have the time or energy to do justice to the family business or might be struggling to change with the times because of the weight of family tradition. Bringing in new blood could reinvigorate the business to higher growth and end up with a smaller piece of a much larger pie.

You shouldn’t let family ties bind you to a business particularly if it’s no longer producing the returns your family needs or if it feels more like a burden than a blessing. If the family business is preventing you from following your own dreams or you feel you’re holding the business back, then get in touch with us to work through the options available to you.