{"id":34708,"date":"2023-07-12T13:49:22","date_gmt":"2023-07-12T17:49:22","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/when-selling-a-family-business-timing-isnt-everything\/"},"modified":"2023-07-12T13:49:23","modified_gmt":"2023-07-12T17:49:23","slug":"when-selling-a-family-business-timing-isnt-everything","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=34708","title":{"rendered":"When Selling a Family Business, Timing Isn\u2019t Everything"},"content":{"rendered":"
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For family business owners, the decision to sell all or part of their business is often one of the most difficult moments of their lives. One or several generations\u2019 work and legacy are being put on the block, with expectations and emotions running high. How do you know you\u2019re getting the right price? What do you need to do to attract the right buyers? To what extent can the family, including the next generation, remain involved with the business?<\/p>\n

The immediate temptation, often reinforced by advisors, will be to focus on optimizing financial considerations. But the reality is that trying to \u201ctime the market\u201d is extremely difficult. Looking at the past few years with perfect hindsight, an owner \u201cshould have\u201d sold their business in the last quarter of 2021, when buyer interest and multiples reached a historic peak. As the graph below illustrates, that peak was short lived.<\/p>\n

For full-year 2022, middle market M&A declined 21% in value and 10% in volume from the prior year, and almost two-thirds of PE firms expect M&A volumes in 2023 to be lower or flat compared to 2022. Since even a smooth sales process takes two or three quarters, and most processes have significant twists and turns, a business timing the peak would have been the equivalent of a surfer trying to catch waves running at several times their speed.<\/p>\n

So, if optimizing financial considerations is already so difficult, what about the other considerations and complexities affecting the sale of a family business \u2013 legacy, expectations, and satisfying a multitude of stakeholders? In our experience, correctly prioritizing and navigating through those issues, more than optimizing the timing of any transaction, often simplifies the process. The result can be that the owner feels confident that she made the right decision about a sale, her future, and the future of the business.<\/p>\n

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Do You Hate Mondays?<\/strong><\/p>\n

At Brightstar Capital Partners, we frequently speak with family business owners who are contemplating a sale but aren\u2019t sure that they\u2019re ready to make that big leap. Before getting into the financial and valuation aspects, we ask them a series of simple questions, such as:<\/p>\n