Preparing for the potential sale of a family business

Listen to Harry Martin, a Family Business Advisor and Family Office Expert explain how to address and get ready for the decision or not to sell the company. To properly handle events, like deciding the sell the company, it is important to prepare in advance by appointing a spokesman who has rehearsed for this occasion. Family business who develop family offices and elect leaders experience an easier time when dealing with unusual circumstances.

Let’s go to a recent example of what happens when a family has an offer to buy its company. And the family has not had the advantage of a family office, and a family council, and governance, and communication which allows them to know each other, which allows them to create leaders in the family, and they’re sitting there and in comes a powerful, outside person to buy their company. The really effective families would have had rehearsals: “what happens when somebody wants to buy us? How do we make the decision?” When you don’t have the family governance, the council, the, the family office, you don’t have communication, you haven’t created family leaders, you haven’t delegated to family members the ability to make big decisions, there’s chaos. The buyer comes in, he picks off, OK we can get this group of stock from these people, maybe they’re mad at the others. It’s like a military campaign where you don’t have a central leadership, the enemy picks you off and you’re gone. So the family who trains itself to get ready for the big event where somebody wants to buy their company, they have designated spokesmen. Another thing, they have a rule, nobody talks to the press except for father Joe, and Aunt Gertrude, and they’re experienced at talking to the press. Or nobody talks to the press except the head of the company. OK? And, we start getting together, and meeting about the offer, and voting, and we determine what we’re going to do, and we do it as a block. So then if you sell the company you say to yourself: “hey, that was fair. I had a voice in this. We had a governance, we chose Johnny who’s 42, who’s the driver, and we had old Uncle Jeb who’s the senior guy, and Aunt Gertrude and they were committee of three, and they led us, and they got the best price for us, and we all were treated equal, we feel fine.”