Best Practices for Selling a Family Business

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I came to know a gentleman who, years before we met, sold the business he and his late father had operated for more than three decades.

He did very well in the transaction but failed to prepare his family for the “sudden wealth” that poured into their lives. Lacking adequate guidance, some family members spent too much, and others made impulsive financial decisions. Soon enough, rifts developed as a lack of sound financial planning and management. The mistake resulted in missed opportunities, squandered resources, and hurt feelings.

Life changing

Selling any business is hard, but selling a family-owned business can be agonizing. It calls for striking a balance between two imperatives:

1. The need to focus your time and effort on finding a buyer and executing the deal; and

2. The need for continuous personal and family wealth management – a process that can foster an enduring legacy of multi-generational prosperity.

Other financial considerations in and around the sale of a family business include doing right by employees and weighing the best U.S. locations for owners to reside before and after the deal is done.