Selling the Family Business Is it time for the family and the business to go their separate ways?

What happens when a likely buyer offering big money approaches a family business? It's occurring more and more frequently these days because consolidators see great potential in buying up companies in industries where family businesses prevail.

Family businesses are sometimes so tempted by the initial offer, they look only at the traditional financial reasons why the sale makes good sense. The problem is, if you and your relatives share values, an awareness of the legacy of the business and common hopes for the future, then business motivations aren't the only reasons to think twice about selling the company, says Richard L. Narva of Genus Resources Inc., a family business consulting firm in Needham, Massachusetts.

Look at the business's future and examine the foreseeable external and internal conditions that might affect it. Consider whether this is the optimal time to sell the business given its stage of development and the market. And then determine whether the succeeding generation is in place, competent and interested in taking over. But there's more to selling a family business than the obvious. If you're holding on to the following fictions surrounding a possible sale, dispel them before you even think about it.