Business Brokers NJ: Article About Selling A Family Business
Selling a family business involves more than just negotiating a deal because a family business is not the same as it is with unrelated business partners. Family businesses involve emotions and feelings that can get damaged when one family member feels wronged by the one selling the business. Families have been known to stop talking or choose sides during a business sale and never fully repair the relationships. But the main goal of most families is to sell the business with as little discord and as much profit as possible. If you need assistance one of our business brokers NJ will be happy to sit down with your family and discuss why it's the right time to consider selling and explain the more complicated details.
There are a variety of factors that contribute to the decision to sell the family business. You can wait for profits to increase or a younger generation to mature and see if they want to take over the business. There are a few factors you can look at to decide when it's the right time to sell and how you want to inform the family of your decision to sell.
In order to do this, the family members with the authority to sell need to explain why they're selling and how the sale will benefit everyone involved. As long as your family can see that they're gaining something from the sale and not losing a legacy or tradition, they're more likely to be understanding and accept the fact that now is the time to sell.
If the money will be invested for each family member who is attached to the business, explain how those investments will grow and help pay for weddings, college tuition and first homes. If older family members are a part of the business, explain how selling will allow them to retire and go enjoy life without having to worry about the business. Any positive area should be discussed in detail before you get involved in a sale.
Your business broker is familiar with what commonly happens to family businesses after they sell, so take his advice on how to approach your family.
Have a question regarding business exit planning or business acquisitions? Please ask the business brokers from Selby Associates of Cherry Hill NJ today.
For example, if your business currently donates products or services to charity, that may not continue with the new business owner. The community will feel the impact and your family members may be discouraged that they can no longer use the business for good deeds. The more they know in advance of the sale of what to expect, the better.
Family businesses generally run successfully for decades because there is always a family member willing to take over and keep the business going. However, some families run smoothly for years, only to stumble upon a generation interested in going their separate ways and not keeping up the tradition. If you know that your future generations are more interested in pursuing other professional paths, now is the time to consider selling. If the future generations show an interest in taking over but seem unqualified then you may not feel comfortable leaving the business to them. If you have no competent successor, you can begin prepping the business for sale even if you don't want to sell for another few years.
Family businesses go through the same ups and downs as any other business. But unlike traditional businesses where an investor or owner is concerned only for their own future, a family run business usually concerns itself with the future of all family involved in the business. If the business has been struggling for a few years, talk to a business broker about improving the business. The broker will be able to tell you if the business is salvageable or if it's best to begin prepping for a sale. You want to sell when the business still has some good points so that buyers are attracted to the company and willing to pay a fair price. While it may be difficult to part with a family business, it's best to sell when a broker can find you promising buyers who will pay close to what you're asking.