Introduction
The world of buying and selling businesses is complex and multifaceted. It’s not just about business buyers, selling to a strategic vs financial buyer, synergies or EBITDA. This is where family business coaching and consulting comes in handy.
When selling a business, it will impact both the blood family (relatives) and the work family (employees and colleagues). And remember, to many business owners with staff who have been with you for decades, work family can be much closer than some blood family.
Here are some considerations for each group:
Blood Family
Interfamily Dynamics:
The decision to sell a business can have emotional consequences within the blood family. There might be differing opinions or conflicts regarding the sale, especially if some family members were actively involved in the business and have strong emotional attachments to it. It’s important to manage expectations, communicate openly, and address any potential conflicts or concerns to minimize the impact on family relationships.
The way a family member conducts themselves at the family cottage or Sunday night dinner will not change under the roof of the business. If your kid is quiet and shy or brash and pushy they will typically be the same in either environment. When it comes to selling the company nothing will change. Although now their spouses, children and friends get to chime in. If you don’t set the rules before going to market, and rigorously adhere to them you could potentially end up with lawsuits, a poor sale or no sale at all.
Intergenerational Wealth:
The most important aspect of new found extreme wealth that can come from selling a business tends to be intergenerational wealth management. In my conversations with Sellers, they tell me their key worry is about passing on this wealth to their grandchildren and great grandchildren. I strongly urge them to seek the help of a financial advisor for creating a generational succession plan. Find one with an affinity for family business coaching.
Financial Impact:
Selling a business can have significant financial implications. If the business sale results in a substantial monetary gain, it can positively impact the blood family’s financial well-being. It may provide them with newfound wealth or financial security. On the other hand, if the business was a primary source of income for the blood family, the sale could create uncertainty or financial strain if they haven’t planned for alternative income sources.
The sale of a business can have significant financial implications for the blood family, especially if they are directly involved in the business or rely on its profits for their livelihood. The proceeds from the sale can provide financial security or even open up new opportunities for the family members.
Lifestyle Changes:
Selling a business might bring about changes in the family’s lifestyle, especially if the business has been a significant part of their daily lives. The sale could result in a shift in priorities, routines, and available resources. Not every family member is suited to new found wealth. You may want to set up trust funds to manage the wealth for them.
Emotional Impact:
Family dynamics might change as a result of selling the business. Family members who were actively involved in the business might experience a sense of loss, identity shift, or even conflicts over the decision to sell. Anger and resentment can show itself particularly if they have no say in the decision to sell.
Work Family
Work Family Transition:
The sale of a business may affect the work family, including employees and colleagues who have become part of the business’s culture and community. If the business is sold to a new owner who plans to continue operations, the impact on the work family might be minimal, depending on the new owner’s management style and approach. However, if the business is closing down or significant changes are anticipated, it can lead to job losses, uncertainty, and changes in the work environment for employees. This can have emotional and financial consequences for the work family. Most owners I have worked with consider the wellbeing of their staff to be a top priority
Job Security:
The sale of a business can create uncertainty for employees and colleagues. Depending on the buyer’s intentions and restructuring plans, there could be potential job losses, changes in job roles, or shifts in company culture. This can affect the work family’s stability and sense of belonging.
Organizational Changes:
A new owner might bring in different management styles, strategies, or values, leading to changes in the work environment and overall company direction. This could impact relationships and the work family’s sense of camaraderie.
Opportunities and Growth:
On the positive side, the sale of a business might introduce new growth opportunities for employees. The new owner may invest in expansion, innovation, or provide resources for professional development, leading to potential career advancement for the work family members.
That said, not all employees will embrace the change well. I can assure you, from observing many businesses going through this kind of change, the last person you expect to leave will be the first one to come to you.
Both Blood and Work Families:
It’s important to note that the specific impact of selling a business can vary depending on various factors such as the nature of the business, the terms of the sale, the business buyer’s intentions, and the overall economic climate. Open communication, transparency, and careful planning can help mitigate the potential negative impacts and foster a smoother transition for both the blood family and the work family.
Loyalty and Trust:
Selling a business can impact the trust and loyalty of both the blood family and the work family. If the sale is handled transparently and with the best interests of all parties in mind, it can strengthen trust and loyalty. However, if the sale is perceived as unfair, abrupt, or lacking communication, it can strain relationships and affect the willingness of employees and family members to trust future business endeavors or decisions.
Future Opportunities:
Selling a business can create new opportunities for both the blood family and the work family. It might allow the blood family to pursue new ventures, invest in other businesses, or retire comfortably. For the work family, it can present opportunities to seek new employment, start their own ventures, or join the acquiring company if one exists. However, if the business was the primary source of income or employment for the work family, the sale may also disrupt their livelihoods and require them to search for new opportunities.
Conclusion
Congratulations on making it this far in this extensive guide. I truly appreciate your dedication to learning about The Impact On Your Blood Family vs Work Family When Selling a Business. Your suggestions will be taken into account to ensure that this guide is continually improved.
Selling a business can have significant impacts on both the blood family and the work family. Financial implications, emotional dynamics, job security, trust, and future opportunities are all factors that can be affected. Open communication, thoughtful planning, and empathy for all parties involved are crucial to mitigating any negative impacts and fostering positive outcomes
Are you asking yourself how long does it take to sell a business? Or should I sell my business? What are the steps to selling a business and how much do I sell my business for? What is EBITDA and EBITDA margin? Do I need a business value consulting professional to calculate value of a company? If you’re looking for tips for selling a business and increasing your customer base, from someone who specializes in family business coaching and consulting, you’ve come to the right blog.
As a trusted business advisor and sale advisor providing sell side advisory services I appreciate the opportunity to share my years of experience working with Owners just like you who have demonstrated their entrepreneurial spirit for years. In fact you may want to consider our online program ‘Sell Your Business 4 More.
