Family Matters When Selling Your Business

confidentiality devalue a business familiy in business Feb 23, 2024

When a seller comes to me with a business where family members are part of the daily operations or management, there's more than a bottom line to keep in mind. 

A buyer coming into a sale is already concerned about confidentiality, and the family dynamics can add additional concerns. When you're looking to sell, it's important to let the family working in your business know with as much notice as possible. Plan ahead, and determine the intentions of each person in the business. Do they want to leave when you leave? Are they interested in remaining in the business after the sale?  

When you know the answers to these questions, you can plan ahead, replace those positions that will become vacant, and put together the proper confidentiality and nondisclosures to put a buyer at ease and solidify the sale. Without these precautions, buyers get nervous. A lack of foresight and preparation where family matters appear in business causes buyers to devalue your business. 

Tackle the family conversations early so that those who are looking for something new can make those moves before you put your business on the market. With the right pieces and people in place and clear communication with family, you'll address some of the biggest concerns a buyer would have regarding family working in your business. 

Take the steps to plan well where family and your business are concerned. It's never too early to start planning for a sale. Let's start a conversation that positions your business for successful sale with maximum benefit for all involved. 



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About Gokul Padmanabhan

Gokul has spent his entire career as a small business owner like you. He learned a lot throughout the process of starting, growing, and selling several businesses. One important lesson: most business brokers didn't add much value to the process of selling his businesses because they didn't understand them.

So, he became a business broker and immediately learned another important lesson:Ā to really understand the businesses you sell you need to specialize in a single market.

So, he specialized in selling restoration businesses, and so was born Restoration Brokers of America.

After more than 15 yearsĀ  of evaluating and selling restoration businesses, RBA has learned another important lesson: most businesses we see can be worth hundreds of thousands of dollars and, sometimes millions, more if the owner will manage his or her business a bit differently as they prepare to sell.

We call this Managing for Value. It's not complicated. It's not difficult. It's just different.


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