There comes a point in every family-owned business when it’s time. After years of building a successful business, you’re ready to move on and retire. You’ve dreamed of one day turning it over to your kids. After all, they grew up in the family business. But what if your children have other plans? That’s when you may need to look at other options—like selling the business. Here are some factors to consider.
Start with this question – What do you want the sale to look like? It’s important to think about the answer to that question because it will help you develop a plan. Then write it down. It may change over the years, but at least you’ll have a foundation. Share it with your family and staff, as appropriate.
Here are some questions to consider as you map out your vision:
How important are you to the ongoing success of the business? If the business can’t survive without your day-to-day management, it may not have much “curb appeal” to potential buyers. They want to know that the asset they purchase has a good chance of returning a profit, without you.
Think about it this way. What would happen if you took a month-long vacation and didn’t call in or check emails? Buyers hope the answer is: “The business just kept running like it always does.”
That’s why it’s important to gradually separate yourself from the operational aspects of the business. That can include the following activities:
There are a number of professionals who can help create your plan. It needs to take several aspects into account—legal, financial, talent management. So, it makes sense to take a team approach. The team might include your accountant (CPA), tax advisor, attorney, financial advisor, and management specialist. Some financial planners can serve as a coordinator of the team.
You may also want to look at the Small Business Administration’s “Plan Your Exit” tool on their website.
If you decide to sell your business to an outside buyer, you need a plan in place. Consider these factors and gather your team so you’re ready when that day arrives.