Selling a Family Business
Family business can be tough to sell. Not only that, the process could be quite stressful. Most of the time owners may have close emotional attachment to their businesses. They identify with products and services that they are offering.
Some of these businesses are the only source of livelihood that lasts for generation. For those entrepreneurs who own family businesses, this determine place in society and could either define their identities.
When these people decide to sell their business, it could be stressful. Often time, the transaction is an even they are not used to. When selling a family business the stakes could sometimes be high because it can affect the family. Since family owners can have a strong relationship with their employees, they keep this as a secret so as not to upset them in transition. Aside from stress, there is a fear of failure. As we all know, selling any kind of business involves time, money and effort. Add up to the fear that the buyer can back out.
Timing is very crucial in selling the family business. There is a need to get the best price. It is best to sell the business during the time when the financial situation is actually successful. The first thing to do is create a time composed of advisers and consultant. This is a good idea especially if you need advice. It is important to know by heart what is being sold. Sometime many business owner, don’t have a clue about their business. They just own the company by name and got nothing to do with whole process. It is essential to know everything about the business.
Before even putting an ad for your business, it is noteworthy to know how much it is worth. Depending on the type of business, it is very helpful to know its value. As early as possible decide on the terms of payment. You could accept installment. As a seller, you need to make sure that everything is all set. Meaning there are few issues to resolve. Check if every aspect of the business is working well. Clean up is very difficult so you need to have a plan for this process.
In selling any business, you need to develop a good marketing plan. You need to know how you can market this kind of business. You could do advertisement on your own or hire someone who would do the work for you. This is good if you want to pay fees and commission. Once you got a potential buyer at hand, there should be negotiations. This is very crucial. There are issues that can arise during this process like price and terms.
For first time owners, there is a need to produce agreements. A lawyer can be the one to handle this area but make sure you understand the whole process. Set expectations that are realistic enough. Draft a letter of intent. The best thing about selling a business is closing it. Make sure all the documents are prepared. Last but not the least is to celebrate after the hard work.
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