WHEN SELLING A FAMILY BUSINESS, TIMING ISN’T EVERYTHING

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’ work and legacy are being put on the block, with expectations and emotions running high. How do you know you’re 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?

The immediate temptation, often reinforced by advisors, will be to focus on optimizing financial considerations. But the reality is that trying to “time the market” is extremely difficult. Looking at the past few years with perfect hindsight, an owner “should have” 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.