editing disabled

Selling the business creates special challenges for a family business: Does the next generation want to own the business? If so, are they capable of managing the business? Can the next generation buy-out the current owners?

Many obstacles arise when considering the option of selling a family business, especially if the reasons for selling the business are strictly financial. When a business has been running for more than one generation., there is usually a sense of belonging that all family members feel, and if it has been a good experience to all members, the financial downfall, and ultimate sale of the business can be quite life changing and detrimental. But when the question to sell comes about, there are a series of steps that the family must undergo before making that final decision, whether it be a dreaded one, or the next step to relief and happiness. First they must determine if the selling is realistic. The must also know the current market value of the company. If this is unclear, the ramifications can range from:
· Failure to optimize the sale price
· Overpricing leads to no sale at all
· Missed hidden asset values
· Is it even the right time to sell?
· Needless exposure of company information to the market
Once these potential consequences are realized and the market value is determined, prospective buyers must be identified. The selling process can be quite hard, considering the buyers are not always in line with the way your family business’ morals have been. So in certain situations, one must decide if the offering is worth changing the business image forever. It is not a quick process to sell a family business. It can take years, especially if it is not vital to sell it at the moment. In these cases, it gives the family more time to find the right person to continue the business’s privileges. In the long run, it leaves the family with a better understanding that the business will be continued under the correct management.

Hawkins, George B., and Michael A. Paschal. "The Key Steps Involved in Successfully Selling the Family Business." Banister Financial's Business Valuation Services, Charlotte, North Carolina, For Purposes Including Gifts, Estates, Tax Planning, Valuation Discounts, Buy/Sell, Disputes, Divorce, ESOPs, Shareholder Agreements, Business Damages, Etc. 2000. Web. 12 Nov. 2010. <http://www.businessvalue.com/>.

Tim Moss

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