According to the latest reports from the business sector, there are currently around 5.5 million family-owned businesses in the United States. Worldwide, the figure is greatly compounded. It’s no secret that a great deal of pride can come from having a business that’s owned and operated by your family.
In some cases, it can help strengthen the family bond. At the same time, it certainly gives founders something of monetary and sentimental value to pass along to future generations.
When Things Take a Turn
Of course, a family-owned business can sometimes have a negative impact rather than a positive one. That leads many families to consider selling their companies. Still deciding whether it’s a good idea to sell or holding onto the business and waiting out the storm would be a more suitable solution isn’t always an easy feat.
Business Transition Advisors can help with such a monumental decision. In the meantime, take a look at some of the most significant deciding factors to help you make the choice between selling or holding onto your family’s legacy.
Understanding When to Sell
Quite a few issues can be warning signs that it’s time to sell a family business. One of the most common is having internal conflicts in your family about the business. When rising generations are preparing to step into a business, disagreements often arise over how the company should be operated.
It’s not uncommon for different generations to disagree over materials, manufacturing processes, service delivery, and many other aspects as well. Even marketing and advertising concepts can lead to family-wide conflicts.
Additionally, if your family needs immediate money from the sale of the business more so than the long-term income it could generate, this would be a good time to sell. In the event the business is faltering or has lost its relevance to the market over the years, selling may be the better option.
If no one in the family’s upcoming generation wants to run the business or no one has the leadership skills and initiative to maintain its success, trying to hold onto the company could be pointless as well.
Knowing When to Hold on
It’s also important to realize that selling the business may not always be the best solution. All businesses face challenges from time to time. In many cases, they’re temporary. Sometimes, all it takes to turn a company around is revamping its business model or bringing in new talent.
Having a fresh set of eyes involved can work wonders for a company that’s struggling. Updating your customer service approach or redirecting your product lines to meet the evolving needs of consumers can help as well.
If your company is facing financial hurdles, you could lose more than you gain by jumping into the concept of selling. Maybe you just need a few new investors or a new product to wow the public. Keep in mind, if you sell at the wrong time, you could ultimately sell yourself short in terms of profits. Patience is often the key to success.
Bottom Line
Selling a family business isn’t always the right choice. Of course, it’s not always the wrong move, either. Take stock of your company, the problems it’s experiencing, the current state of the market, and other factors. Determine whether anyone in the family still has the skills and desire to keep the business going.
From there, you can make an informed decision on whether to sell or forge ahead with the company. Don’t hesitate to reach out to the professionals for experienced guidance as well.