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  • Writer's pictureTrevor Dickinson


Conventional wisdom attributed selling to poor performance, lack of management successors, getting an offer that “could not be turned down,” and other superficial reasons.

Family business owners historically viewed the inability to successfully pass ownership from generation to generation as a failure of sorts. And their mission was to help families make their businesses sustainable over generations.

While lack of qualified successors may be triggers for considering the possibility of selling, there are many successful family companies that choose to ameliorate those challenges. Their companies are now being managed and led by top-level non-family executives. Some have gone public to create liquidity for the family members and key executives.

Selling founder-owned and family companies encompasses far more complex issues – like moral considerations and philosophical predispositions. In public or investor-owned companies, selling boils down to business and financial implications related to increasing shareholder value.

The trigger points for selling businesses can be categorized based on Business, Family and Ownership.


  • Changing industry dynamics, making it difficult to compete.

  • Industry consolidation.

  • Lack of growth opportunities.

  • Need to change core business.

  • Weak economy.

  • Restrictive environmental changes.

  • Sick industry with poor outlook.

  • Shrinking market.

  • Business too demanding.

  • New global competition.

  • Disruptive technology.

  • Losing market share.

  • Debilitating price wars.

  • Eroding profitability.

  • Capital requirements.

  • Reduced appetite for risk.

  • Protection against an uncertain future for the company.

  • Soaring valuations and high purchase prices.

  • Product liability exposure.

  • Increasing litigious activity in the industry.

  • Government regulation and constraints.

  • Management relations problems.

  • Lack of successor management prospects.

  • High employee turnover.

  • Inability to attract talent.

  • Changing skill sets required in the company.

  • Owners losing interest in and passion for the business.

  • Aging management.

  • Need for new blood and energy in the business.


  • Conflict in the family and unrest.

  • Low family morale and interest in keeping the company.

  • Backbiting and negative intrigue.

  • Divorce.

  • Stress on matrimonial and family relationships.

  • Poor prognosis for family relationships.

  • Company not compatible with family values or supporting family’s image.

  • Differing interests of active and passive shareholders.

  • Liberating children from a “duty millstone”.

  • No passion in the family for the business.

  • Income security and liquidity for family/shareholders.

  • Estate planning needs.

  • Fear of business failure.

  • Benefits of diversification of family wealth.

  • Poor financial returns to shareholders.

  • Market value of the company exceeds earning ability of the company.

  • No talent in the family to carry on the company as leaders or responsible shareholders.


  • Getting an unsolicited off that cannot be prudently refused.

  • Age of owners active in the business.

  • Lack of interested younger generation.

  • Burned out – no more appetite to fight the competitive battles.

  • Fed up with employees, relatives and the business.

  • Physically worn out and tired.

  • Desire to monetize wealth and be relieved of responsibility.

  • Tax issue encouraging a sale.

  • Insufficient liquidity.

  • Less appetite for risk, leverage, and loan guarantees.

  • Desire to retire and leave the business.

  • Join friends who have sold their companies.

  • Desire to do other things.

  • To have complete independence outside of the business.

Very different outcomes among companies in virtually identical external circumstances reveal that conventional wisdom doesn’t fully explain the decision to sell. There is more to why some companies make the decision to sell and others don’t.


The real answers why some companies sell and others don’t can be spelled out by the juxtaposition of passion for the business and company versus fear, fright, and anxiety.

Every family business leader experiences both fear and anxiety about the business at various times. These feelings can be motivating or debilitating, but when their intensity exceeds the intensity of the family’s passion for the business and the company, its time to sell.

When the passion is dying, bad things begin to happen – loss of innovative spirit and soul that drives the business; loss of market share; decaying business processes; aging and, in some cases, obsolete plant and equipment; deteriorating employee morale; and erosion of financial performance and liquidity. Its extremely difficult to reverse the direction. If your own company is showing signs of deterioration, corrective action should be taken. The infusion of new talent can be a tremendous asset in revitalizing a company in need of improved performance. An informed decision really can’t be made about selling until the infusion of new energy starts to pay off.


Family Legacies is a multidisciplinary family business consulting company. Our consultants are leaders in their respective fields including; Family Business Consulting, Strategic Planning, Financial Planning, Wealth & Risk Management, Corporate Finance, Business Transitions & Exit Planning - Buy, Improve, Grow & Sell Businesses, Commercial & Family Law, Executive Coaching, Leadership Development & Facilitation, providing our clients with a professional and integrated multi-disciplinary service.


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