You may have dreamed of passing the family business down to your children and your grandchildren, hoping your enterprise would grow. However, that’s often not how it works. Many family businesses that survive their founders don’t have any clear heir to take the place of the original owner.
After all, it takes a special sort of passion, drive and resilience to run a business. Not everyone is cut out for the job just because they’re born into the family.
The Family Business Institute says that ownership succession issues often trouble family businesses. Here are some tips that can help you avoid mistakes:
1. Start the mental preparations early.
It may take only a few months to sell your business — but it may take you and your family a while to come to terms emotionally with the loss of what has become central to your lives. Start talking about selling and processing your emotions about three years (if possible) before the time comes.
2. Talk to an attorney about your desired results.
You can go about selling the business several different ways — whether that’s through installments, a lump-sum, a buyout structured on future profits or some other options. Each choice has significant legal implications and tax consequences that you need to consider. It’s smart to talk to an attorney before you list the business for sale so that you understand the potential options and what you are (and are not) willing to consider.
Our office can guide you through the sale of your family business. Learn more by reviewing our site further or contacting us directly.