When running a family business all aspects of growth and exit strategies still apply. However, exit strategies can, especially in longstanding generational family businesses, be emotive.
Growing your family business
Are you looking to take your business to the next level?
There often comes a point when family business owners want to start growing their business through either:
- Mergers and acquisitions - purchasing another company or a company's assets to secure a larger market share, revenue and a more dominant position in the market
- Partnerships - perhaps with distributers, dealerships or suppliers or someone that has other capabilities which you do not have that can extend your network
- Extending the number of sites into other geographical areas
- Expanding your product/ service portfolio - dependant on the business concerned and its sector, a wider range of products and services could be an option or even innovation, think about demand and competition, but also something innovative - do you research first
Careful consideration needs to be taken as to the best approach for your business in the current marketplace and you may benefit from speaking to an advisor when starting to make plans.
Exiting your family business
All business owners reach a point where they have to consider their future role in the business, however in family business that decision is highly emotive.
When looking to exit a business, owners often ask themselves:
- What will happen to the business when I decide to move on?
- Should the business be sold?
- Is there a successor ready to assume the leadership and how will this be funded?
- Would the current management team be interested in buying the business?
- Should the business become a publicly listed company?
- How do I help ensure the maximum return is received from the business?
- Will employees' jobs be safe if I sell?
Every business should have an exit strategy in place to identify a vision for both the business and yourself. Advisors usually suggest having a strategy in place some years before the exit.
Exit methods can include:
- Transferring the business over to another family member - in a longstanding family business that decision will no doubt have been discussed and planned for some time;
- Selling the business - preparing to sell your business requires in-depth planning over a number of years to achieve maximum potential; or
- Management or employee buyouts - this is often a popular option if a family member hasn't been identified. Again, this requires in-depth planning.
Fully preparing the business for your exit is not a small task and can be stressful. Many family business owners benefit from professional advice and guidance when considering all of the matters addressed in this article.
For more information contact Pauline Rigby in our Corporate department
via email or phone on 0333 207 1131.
Alternatively send any question through to Forbes Solicitors via our online Contact Form.