Selling a family business is a unique challenge that can present unexpected hurdles. This episode reveals the complexities you’ll face and gives you actionable advice on how to handle them. You’ll learn how to navigate family disagreements, plan for your legacy, and prepare for a successful sale that satisfies all involved.
Don’t wait till someone’s knocking at your door to try to figure out the value of your company. Planning is key, and planning earlier than you expect to sell is the name of the game.
Jessica Fairchild
What You’ll Learn
Start planning early, and get your valuation done: Don’t wait until a buyer comes knocking to figure out your company’s value. Knowing your business’s worth and what to expect from the market is crucial. This proactive approach can also help you plan your estate and make better decisions before a sale.
Be prepared to manage a complex ownership structure: Family businesses often have multiple owners across different generations, trusts, or entities. Getting everyone on the same page and a firm-wide agreement to sell is often a complicated and time-consuming process that requires a lot of patience and clear communication.
The buyers you attract may depend on your values: Family businesses have a unique legacy and culture that many owners want to preserve. You might not be willing to sell to just anybody, and that’s okay. You can narrow your list of potential buyers to those who align with your values, such as a strategic buyer, another family office, or even an ESOP.
Non-cash compensation can complicate the deal: While the cash from a sale is typically split pro-rata, non-cash components like earnouts, seller notes, or rollover equity can be handled differently. Be prepared for complex discussions about who gets what, as these elements are often unique to each individual’s needs.
Prepare to separate business and personal affairs: A family business may often handle personal affairs for its owners, such as tax planning, managing properties, or personal investments. When you sell, you’ll lose these services, so you need to identify them beforehand and have a plan for how to handle them after the deal closes.
Topics Covered
Defining a Family Business [2:41]
Managing the Complex Ownership in a Family Business [4:06]
Valuation of Your Family Business and Estate Planning [13:08]
Handling the Non-Cash Components of a Sale [17:49]
Legacy and Non-Financial Motivations for a Sale [20:49]
The Blurred Lines Between Your Family Business and Your Personal Life [24:07]
Generational Differences in Family Businesses [29:08]
Partner at Croke Fairchild Duarte & Beres | Chicago, USA
Jessica co-founded Croke Fairchild in 2019, after having worked in several other law firms which she founded and managed. Over her 24-year legal career, Jessica’s principal legal focus has been on corporate, mergers and acquisitions and governance matters, where she counsels founders, boards, private equity sponsors, family enterprises and corporations on their most strategic transactions. Jessica’s focus on building relationships and her client-centered approach has helped her garner many long-term clients whom she has worked with on M&A matters and beyond, including as general counsel for their growing organizations.
You’ve invested your blood, sweat, and tears into an enterprise that has provided for you, your family and your employees. The moment has finally come for you to start a new chapter in your life. Explore your options now.
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