The options for selling your family business

Leaving your business can be the hardest task for owners of family businesses – I’ve done it myself so I know what it’s like!

Now is one of the best times to realise the value you have built up in your business and enjoy a happy retirement.

So, what are some of the options?

Sell out completely – It’s likely the new owners will put in their own managers or merge the family business with an existing business. Buyers will regard a 100% sale as risky, which may reduce the price offered.

Partial sale with ongoing role in business – Earn-outs are becoming more popular to reduce the risk to the buyer but increase the potential proceeds to the seller. If the earn-out works, the seller may enjoy part of the value of the future growth and the buyer’s ability to increase the value of the old family firm. But if the earn-out fails, then the seller of the family business has taken most of the risk.

Retaining a stake with no ongoing involvement – If the owners have a succession plan and it enables them to realise most of their stake in the family business, then so far so good. Where there is future growth potential, particularly when you look at the miserly returns from investing elsewhere either a Private Equity House (PE) can help here or the existing managers through a buy-out. Arrangements can be made to enjoy the value from the future growth or part of the price can be left on loan account with a corresponding rate of interest and security.

Multiple shareholder family businesses – Often family businesses do not have a clear 100% owner – all the family have stakes, some are active, others are not. A PE may be flexible, buying part of the business now to help tidy up the shareholder base.

So, should you despair?

It’s not all gloomy out there. PE and trade buyers do have cash and both will be creative in the offers they will make to family businesses.

So, how can I help?

I have worked with several family businesses owners looking at their options for leaving their businesses. If you are struggling to work out what to do, then please contact me on 07860 89845207860 898452 or by email: awatkin@assyntcf.co.uk

 

Assynt Corporate Finance Limited, Chartered Accountants, is a member of the Corporate Finance Network which means we can provide access to other accredited national and international firms.  We can also access additional Corporate Finance resources, particularly in the areas of advertising businesses for sale discreetly and accessing those lists for our clients who want to acquire business.

    

The information contained in this briefing is based on information available as at the date posted and may be subject to amendment.  It is written as a general guide and is not a substitute for professional advice.  You are strongly recommended to obtain specific professional advice from us before you take any action.  No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this briefing can be accepted by Assynt Corporate Finance Limited or its employees.

eaving your business can be the hardest task for owners of family businesses – I’ve done it myself so I know what it’s like!

Now is one of the best times to realise the value you have built up in your business and enjoy a happy retirement.

So, what are some of the options?

Sell out completely – It’s likely the new owners will put in their own managers or merge the business with an existing business. Buyers will regard a 100% sale as risky, which may reduce the price offered.

Partial sale with ongoing role in business – Earn-outs are becoming more popular to reduce the risk to the buyer but increase the potential proceeds to the seller. If the earn-out works, the seller may enjoy part of the value of the future growth and the buyers ability to increase the value of the firm. But if the earn-out fails, then the seller has taken most of the risk.

Retaining a stake with no ongoing involvement – If the owners have a succession plan and it enables them to realise most of their stake in the business, then so far so good. Where there is future growth potential, particularly when you look at the miserly returns from investing elsewhere either a Private Equity House (PE) can help here or the existing managers through a buy-out. Arrangements can be made to enjoy the value from the future growth or part of the price can be left on loan account with a corresponding rate of interest and security.

Multiple shareholder family businesses – Often family businesses do not have a clear 100% owner – all the family have stakes, some are active, others are not. A PE may be flexible, buying part of the business now to help tidy up the shareholder base.

So, should you despair?

It’s not all gloomy out there. PE and trade buyers do have cash and both will be creative in the offers they will make to family businesses.

So, how can I help?

I have worked with several businesses owners looking at their options for leaving their businesses. If you are struggling to work out what to do, then please contact me on 07860 898452 or by email: awatkin@assyntcf.co.uk

 

Assynt Corporate Finance Limited, Chartered Accountants, is a member of the Corporate Finance Network which means we can provide access to other accredited national and international firms.  We can also access additional Corporate Finance resources, particularly in the areas of advertising businesses for sale discreetly and accessing those lists for our clients who want to acquire business.

   

The information contained in this briefing is based on information available as at the date posted and may be subject to amendment.  It is written as a general guide and is not a substitute for professional advice.  You are strongly recommended to obtain specific professional advice from us before you take any action.  No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this briefing can be accepted by Assynt Corporate Finance Limited or its employees.

 

 

 

 

  • The Business & Technology Centre, Bessemer Drive,
    Stevenage, Hertfordshire
    SG1 2DX United Kingdom
    07860 898452
    Company Number 08414792 Incorporated in England & Wales

    Succession planning and selling businesses in Hertfordshire, Buckinghamshire, Cambridgeshire, Bedfordshire and Middlesex.