By Savannah Suttle (SCHEMA) and Seth Rudin (IBA)

*This blog article has been provided by Mr. Seth Rudin and Ms. Savannah Suttle. Mr. Rudin is a senior business broker at IBA (www.ibainc.com) and Ms. Suttle is the founder and CEO of SCHEMA Management Consulting (www.schemaconsult.com*) which is focused on assisting family-owned & operated businesses when family dynamics impact operations. Schema provides coaching and organizational design consulting to leaders of companies seeking to grow more effectively, with relational resilience and operational efficiency.

Don’t sell yourself short by neglecting the family part of the family business sale. Selling a family business can be as complex emotionally as it is financially. The intermingling of personal relationships and professional interests can lead to unique challenges that aren’t typically present in non-family enterprises. Understanding and managing these dynamics effectively can make the difference between a successful transaction and a fraught one.

Establish Clear Communication Channels

Communication is the cornerstone of navigating family dynamics during a business sale. It’s essential to ensure that every family member feels heard and understood. Regular family meetings can be an effective way to keep everyone informed and involved, allowing members to voice concerns and preferences regarding the sale process. Clear, transparent, and proactive communication is required to prevent misunderstandings and conflicts from escalating — not just during the sale, but afterward. Setting the proper expectations up front with your family members will help avoid these unwelcome surprises.

Define Roles and Responsibilities

In family businesses, roles can be blurred between who is an owner, an employee, or both. During the sale process, defining each family member’s role can help clarify who makes decisions and how those decisions are communicated. This structure prevents miscommunication around the necessary, intrinsic overlap of personal and professional boundaries. Most importantly, however, it reduces confusion, anxiety, and potential conflict by creating clear expectations.

Seek External Facilitation

Bringing in an unbiased third party, such as a business consultant, coach, facilitator, or mediator, can help manage tensions that arise during the sale. Emotional drivers impact business decisions, so don’t be afraid to factor emotions into the equation. External advisors can facilitate difficult conversations, helping the family (or individual members) find alignment between emotional drivers and tactical decisions. Hiring a Business Broker who can lead the process of selling your family-owned business as well as acting as a neutral third party to the buyer will often lesson the pressure on family members. An experienced and skilled M&A intermediary will provide proper guidance to navigate this nuanced process; and this broker should provide unemotional feedback and recommendations which are fact based.

Prepare for Emotional Reactions

Selling a business is an emotional journey, particularly for family members who may feel a deep attachment to what often represents a lifetime of work. Recognizing and validating each family member’s feelings usually eases the grief or change process. If it’s difficult to validate their reactions, try to find “the understandable part” about where they’re coming from and give them space to express. If these discussions become unproductive, consider bringing in a family dynamics coach or therapist to facilitate how the family is processing the sale together. It is often recommended that the owners and family members participate in a hobby to help dilute the stress of selling their business.

Develop a Unified Vision

Aligning on a common goal for the sale, such as financial security for the family or the continued legacy of the business, can unite family members. A shared vision provides a common ground and can help mitigate disputes about the specifics of the transaction. Your business broker should understand what values you want to find in a prospective buyer so that they can protect your desired outcome whether that be receiving top dollar, legacy or both, ensuring your employees keep their jobs, etc.

Implement Succession Planning Early

If the sale is part of a succession plan, engaging in this process early can smooth the transition. Training and preparing the next generation or new owners well in advance of the sale ensures a smoother transfer of responsibilities and can alleviate stress associated with the change in leadership.

Legal and Financial Clarity

Ensure that all legal and financial aspects of the sale are transparent and understood by all family members. This includes the valuation of the business, tax implications, and how proceeds from the sale will be distributed. Business Brokers, Legal, CPA’s, and financial advisors should be involved to explain the details and ensure that all parties are informed, and geographic implications need to be factored in (different states have different structural implications for how taxation will work, for example).

If you’d like to talk further about how to best prepare your family AND your family business for sale, reach out to Savannah Suttle or Seth Rudin.

If you have questions relating to the content of this article or the process associated with selling or buying a business in Washington or Oregon, Seth Rudin would welcome the opportunity to talk with you. Mr. Rudin is licensed to sell businesses & real estate in both Washington and Oregon. Mr. Rudin can be reached at (425) 454-3052 or seth@ibainc.com.

Further, if you have any questions relating to family business dynamics, organizational design or employee relationships, Savannah Suttle would welcome the opportunity to speak with you. Ms. Suttle can be reached at ‪(206) 552-0333 or savannah@schemaconsult.com.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, accounting, legal, and financial planning communities on subjects relevant to the purchase & sale of privately held companies and family-owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

AI can help you lead and love your people better.

In all companies, there are two primary components. The business, and the people. Good businesses have vision, processes, systems, plans, strategies, the list goes on. And all businesses, at least for now, are dependent upon people to execute, refine, communicate, and evolve as the business grows.

If you are reading this, it is probably because you believe that business is fun. At least, most of the time. I know that’s why I got into it. But the more that I’ve learned, and the more that I’ve led, the more I’ve come to realize that business is simple. It’s not always easy but business is simple enough that, at this point, we as humans have more or less figured it out. Regardless of where you learned, what philosophy you ascribe to, or what nuances you have added to make it feel like you are doing things your own way, business is business and business has been figured out. At this point, if it can’t already, we are within years (if not months) of machines being able to “do business”.

You know what isn’t simple? People. And so long as there is more than just you in your business, your business will thrive, struggle, or die depending on those people. I realized that the second I stepped into a true leadership role. And from that moment on, I struggled to find the balance between business and people. I’m sure that no one else here does it, but I fell into the classic trap of “I can do the business things later”. So I would focus on the people. Build connection, foster culture, make people feel heard and seen. And I would see results. The clock would strike 5, everyone would go home, and I would have a mountain of unread emails and to-dos that could never get to-done. You inevitably start falling behind in some areas and the more you miss the more time you then have to spend tracking down information, which invariably needs to come from people. Then you have to make the decision of whether to maintain the relationships you have worked so hard to build, or whether to hope you forgive them when you just get the info and end the conversation, desperate to get back to your never ending to-do list.

If you know me, you’re probably thinking “I didn’t even know you had this many words in you. What were we talking about again?” First of all, thank you for taking the time to read my ramblings. Second, we were talking about AI, and the actual value it has in business leadership. And that value is simply this: It provides you more time to focus on the people, without falling behind on the other things.

AI will not do your job for you. It will not make it so that you get to work a few hours when you feel like it and expect things to still get done. But it will cut down the time it takes to write an email, a report, or a presentation affording you more time to connect with people or knock out a few more tasks. It will be a singular source of knowledge that you can turn to so that you have the info you need to simply get your task done, so that you can then go engage with your people without that unfinished task nagging in the back of your mind. And it will make catching up much, much easier when you do finally prioritize your own life and health and take a few days off, take a trip, or just take some time to unplug. And I don’t know of anything that would have held more value, or more hope, when I was in that situation. I hope the same is true for you.

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