<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=349935452247528&amp;ev=PageView&amp;noscript=1">
Find out where you can get a Taste of TAB... our global events blast is on!

The Alternative Board Blog

Why You Might Want to Sell the Family Business

Aug. 4, 2021 | Posted by The Alternative Board

Regardless of the type of business or industry, issues around succession planning must be faced sooner or later. This is particularly true when you’re looking at the sale of the business, as opposed to passing the leadership reins on to the next generation of your family.

Selling the family business sometimes make an already complex process even more difficult. But rather than wait until external circumstances demand that you take action, planning for a smooth (and potentially profitable) transition will more likely produce the results you wish for.

Here are action steps to keep in mind:

Be clear about the reasons for selling.

There might be as many reasons to sell the family business as there are family-owned businesses. Among the most common factors:

  • Your company’s steady growth has plateaued, with no dramatic upward swing in sight.
  • You and your team can’t come up with fresh strategies to stay profitable.
  • The passion that first drove you has gone away.

Another key motivation is being no longer able to keep pace with changing customer needs and demands. Your products or services may be eclipsed by a leaner, more aggressive competitor—or advances in technology have rendered much of your offerings outdated.

Be sure no one in the family wants to “step up.”

It’s frequently the case that family members in the generation following yours don’t have the same drive to lead that you did. Another common factor is that the children or close relatives of a family business owner lack the ability to run that business successfully or even manage to get along with each other.

Your children may look like promising candidates for leadership positions, but “if they are not getting along now, it will only be worse once they are in business together,” notes author and consultant Terry Monroe. Beware of bad consequences if you force the issue, since a bad outcome “will impact your retirement plans, affect their lives, and possibly destroy the relationships they have between each other,” which in turn can “spill over onto the parents.”

Get your family business in order.

Want additional insight? Read 4 Step Guide to Strategic Planning now to learn more


The timeframe for a business sale is another variable. Sometimes the process can extend over a matter of months, but, when family members are involved, the timeline is often a great deal longer—even more reason to get your house in order as soon as possible. Key action steps include:


  • See that your balance sheet is clear, presentable, and reflects the accurate value of your business.
  • Firm up existing contracts with business partners and suppliers.
  • Arrange a long-term lease before the business is sold, if it relies upon its physical location to operate.
  • Formalize contractual agreements with key employees, (that is, those who are willing to stay on in your absence).

Taking steps like these require time and resources, but they also make your business more appealing to buyers.

Plan for life after the sale.

Selling a business marks a significant step forward in the life of the outgoing CEO or owner. The event can trigger “issues related to cash flow, investment portfolios, how family property is held and how to set up trusts,” notes Forbes.

In such cases, you might need a different perspective about your own personal assets. When planning to sell the business, “considering how to manage your windfall of cash and other assets” will help pave the way to a brighter—and, hopefully, a more relaxing—future.

Want to learn more about creating the best exit strategy from your business? Check out “Are You Ready for Your Exit?” by TAB Facilitator Phil Spensieri.





Read our 19 Reasons You Need a Business Owner Advisory Board


Written by The Alternative Board

Related posts

What Can Predictive Analytics Do for Your Business?
Jul. 19, 2023 | Posted by Lee Polevoi
Every business (yours included) generates a lot of data. Every customer interaction, sale, and follow-up report produce information of great potential use to the organization. The key is harnessing...
The Unique Nature of Personal Vision Statements and the Family
Jun. 23, 2022 | Posted by Allen Fishman
After graduating college with a law degree, I went to work for a publicly owned company. My boss informed me on the first day that my decisions needed to be guided by the principle that the purpose...
3 Ways to Successfully Transition Your Business To New Owners
Aug. 5, 2021 | Posted by The Alternative Board
Transitioning your business is one of the most critical and life-changing decisions you'll make as a business owner. If you handle the process well, you will be helping not only yourself, your team,...
When the Time Comes to Fire a Family Member
May. 11, 2021 | Posted by The Alternative Board
Terminating an employee isn’t something business owners and CEOs relish. When the situation demands some drastic action, however, it’s necessary to follow through for the good of the business. The...
Managing Family Business Conflicts
Apr. 29, 2021 | Posted by The Alternative Board
Small business owners and CEOs have plenty to contend with as part of their normal daily operations. When the business is family-owned, a different crop of challenges may emerge. That’s because “the...
Tips on Effective Business Succession Planning
Apr. 27, 2021 | Posted by The Alternative Board
With many family businesses, the time to think about succession planning starts on Day One. It’s a complicated subject, sometimes fraught with emotional baggage, but is critically important,...
6 Ways You Can Improve Communication in a Family-Owned Business
Apr. 23, 2021 | Posted by The Alternative Board
The golden rule for the success of any family-owned business is to be transparent and have an open, honest, and straightforward line of communication. While communication is critical to the success...
6 Tips on Making a Family Business Partnership Work
Apr. 20, 2021 | Posted by The Alternative Board
We often hear stories about the difficulties of making a family business partnership successful. Yes, there are unique hurdles that differ from other types of business models, but with the right...
8 Common Challenges Every Family-Owned Business Faces
Apr. 8, 2021 | Posted by The Alternative Board
Every business, no matter the format or industry, faces several challenges from time to time. There are problems related to securing capital, talent acquisition, team training, cash flow issues,...
5 Customer Service Blunders Made by Small Businesses
May. 28, 2019 | Posted by The Alternative Board
Is “quality customer service” part of your brand promise? If so, you’ve made a commitment to deliver an outstanding buying experience each and every time a customer (or would-be customer) interacts...