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Exit Strategies: Selling a Family Business

Exit Strategies: Selling a Family Business

December 03, 2021

Exiting a family business presents its own set of challenges and requires some forethought to ensure successful outcomes for all parties involved. Selling a multi-generational business can be more emotional and tricky, and contemplating the post-exit life should occur months in advance. See below for important steps to be considered while developing a strategy for selling a family business. 

  1. Develop a Plan – Just like an owner has planned and executed a growth strategy for the business, a design for the exit is imperative. Discuss and agree upon the plan with other family members or key personnel in the business.
  2. Build a Team – A group of professionals that will help develop the plan and reach goals while maximizing value includes attorneys, financial advisors, CPAs, and M&A experts.
  3. Decide on Timing – Discussions on who will take over (if keeping it in the family) or ideally when the sale will occur should happen early in the process. It may take several years to prepare the company to be attractive to an outside party.
  4. Structure of Sale – Analyze and develop a consensus as to the preferred type of buyer. Will it be a sale to other family members, employees/management team, a strategic acquirer or a private equity firm? This may be the most critical decision to be made to determine the future of the business.
  5. Analyze Tax and Estate Planning – Very little can be done once the deal is closed to reduce or eliminate taxes. Estate attorneys and tax accountants are crucial to make the best decisions, which could have an impact on future generations.
  6. Consider Factors Unrelated to Finances – Do family members feel satisfied with the plan? What will owners do after the exit – new venture, retire, or focus on philanthropy?

 We’re happy to be a part of the team that leads to a successful exit for you or one of your clients.


Matt and Andrew