For family business owners there are two routes to exit the business, either by passing the reins to successors in their families or selling the business to the best bidder. For owners and founders looking to exit, the market for high-quality family businesses remains healthy. While higher interest rates have affected valuations and the pricing of debt to fund transactions, family enterprises remain attractive to many buyers looking to deploy capital. Both strategic trade and private equity buyers continue to look for merger and acquisition opportunities, not to mention the increasing role of family offices in the deals landscape as they pursue more sophisticated asset classes to preserve and grow their wealth.
Key considerations to include
- 1. Assessing what your family business is really worth
- 2. Understanding your goals and the sale process
- 3. Planning for future growth
- 4. Finding the right buyer for your family business
- 5. Preparing for the post-sale transition
1. Assessing what your family business is really worth
Establishing a baseline valuation will allow shareholders to ensure they are aligned upon objectives and expected outcomes.
2. Understanding your goals and the sale process
- Allow adequate time to determine your key objectives and understand the sale process before going to market.
- Typically, you should give yourself 18 to 24 months—or sometimes more—to think about and prepare for an exit, considering various operational, human resources, commercial, financial, and tax aspects as well as selecting the right advisors and team to support.
3. Planning for future growth
- Maximise value by ensuring your company has growth potential with plans like new products or geographical expansion.
- Look at your business from a buyer’s perspective: Are there sound plans in place to execute on your new initiatives, and what are your ideas, prospects, and strategies around growth and innovation?
4. Finding the right buyer for your family business
While price is always a factor, it is often not the only concern. Finding the right buyer involves thoroughly considering your personal and business objectives, from headline price and structure of any deal, through to branding and employee matters.
5. Preparing for the post-sale transition
- Every major change involves a period of adjustment. Often, the deal will include a post-sale period where the owner remains involved to support the transition.
- Consider the impact on key stakeholders like the management team and think about your personal goals post-exit, including how to invest, distribute, and pass down your newfound wealth.
Selling your business is a once-in-a-lifetime opportunity. At PwC UK, we’re dedicated to helping you navigate this complex process to achieve all your objectives.
Contact us
Partner, Corporate Finance - Head of Private Business, PwC United Kingdom
Tel: +44 (0)7763 383782
