Family businesses are owned and managed by several members of the family. This type of business starts small locally. However in some countries, large family businesses own firms. Examples of these firms run by families are the Samsung Group in Korea, Walmart in US and Foxconn in Taiwan.
A family business is hard to manage due to many aspects. According to the Family Institute, only 30% of the family-owned businesses are able to survive further than the time it was founded and only 12% survive after. Family businesses face several problems like family conflicts, financial issues and ownership conflicts. For this reason, many family-owned businesses are sold.
If you own a business and have decided on selling it, here are some ways on how to sell you family business.
Settle all assets
Before you sell your family business you must liquidate all substantial assets. For example, if your family business rents a building and the lot to which it is situated, make sure rentals are paid prior to sale. Also, taxes should be settled and be cleared prior to selling. This will prevent delays in transferring titles due to unpaid balances.
Estimate all assets worth
Have you decided on what to sell? When you do, estimate all values of your chosen business sale. Calculate all your business assets and business debts. In this way you will be able to know the true value of your family business. The result of all your calculations is called as the book value. This will be your basis if whether or not you can sell your family business and how much will it cost.
Search for buyer
After setting your price, you can now search for a buyer. You can call on associates or an attorney who will help you find potential buyers. You can also post on newspaper ads and websites. Your business councils can also assist you in contacting buyers.
It is not easy to look for potential buyers, most of the time, this step takes a long period of time and you need to be patient.
Once you have already found an interested buyer, get your attorney and settle legal papers needed. Make sure to have all transactions in black and white. Agreed installment plans, collateral and due dates should be written and signed by both parties – the buyer and the seller.
In order to be able to sell you family business, all members must decide and agree on it to avoid any future conflicts. The success of selling your family business is achieved when you work on it through legal terms.