"Family firms account for two in three private sector enterprises in the UK economy - 3 million firms"
Things to Do: Check your shareholders agreement.
1
Can you sell with or without all parties' consent?
2
Value: do all parties agree on minimum figures? Get professional guidance on this. You cannot second-guess value. I have sold businesses where I have had offers ranging from £1m to £5m for the same company.
3
Who is going to do what in the process? From an internal point of view, you will be beauty-parading to various buyers. You need your best salespeople on show as well as your best money man or woman. These may or may not be family members,
4
Get your house in order, including your books, records, customer and employment contracts. Get rid of, or at least be aware of, any nasties.
5
Be 1,000, 000% certain you are committed to the sale at completion. You may feel guilty and hugely remorseful. Selling can be a painful experience. One experience I had with a business
was when two brothers had no heirs to hand their second generation business on to. They sold it to a business that was then taken over by a large multinational just before the sale was completed.
Knowing they were selling to a corporation that didn't share their values was a terrible dilemma. But they had committed to getting out, and had already spent much of the money and laid new plans. That sale haunted them for years afterwards, especially when the business was absorbed into that of the faceless corporation. Their mum and dad never let them forget it.
The process
The process of selling is a full-time job. You can do this yourself, but be prepared for a lot of work!
Also be aware that if you take your eye off the ball throughout this process and the deal falls through, you may not be able to go back to the same business.
Action 1
Get the best adviser you can. Their having industry experience is not relevant. What is important is they understand your deal size and your family. You must like them, you are going to be spending a lot of time with them and you must listen to their advice. They have probably seen this a hundred times before. You need someone who will fight your corner and come out with a good and fair deal. This is particularly important if you have to work an earn-out to get the cash value you need. They wil need to be the bad cop to your good one.
2
Keep a private life. A sensible personal life is essential to maintain your sanity, so steer away from Sunday lunch table debates.
3
Have an essential list of no compromises, about 1/2 dozen items and no more. For example, one deal that was due to complete on 23rd December, hit trouble when the buyers announced at completion a desire to drop the purchase price by 15%. When asked why they had decided to do this, they simply said it was because they could!
They had chosen the wrong adversary for this tactic. My client had been previously briefed, and we all folded our papers and walked from the room without a word.
It was nearly 3 in the morning, and we were chased to the car park by the buyers, who insisted on knowing what we were doing.
We all left and had a very poor Christmas.
When January came, the deal was back on and completed. My clients' fortitude and gave them the confidence to stand firm!