Family Coaching: Should I Sell My Business to My Kids?

Rock, be honest. Who should buy my specialty packaging business – my kids or someone outside the family?

This is a common question I get from sellers, “Who should I sell my business to?” If there are family members involved, the question is, “What about my kids?”

To that I say, What about the kids? Why not?

Let’s start with the most obvious question. Do your kids want to buy your business? And do you want to sell to them? Yes? Then what’s stopping you?

A common answer is readiness. Many parents think their kids are not fully prepared for that big step.

Are you sure?

In talking with parents (especially founders), I find they often hold their children to a higher standard and scrutiny than a buyer outside the family.

For a non-family member who is interested in buying the business, the owner may look at whether the buyer has adequate funding, the ability to meet the terms of the sale, the skills to replace the owner’s role, and a background in running a business.

But when it comes to a family member as a prospective buyer…well.

I hear about every personality quirk, financial misstep, family secret, and business drama. Sure, it’s hard not to put more weight on your personal knowledge of a family member, especially if it concerns someone who is going to carry on your business legacy. You think about your kids and wonder, “Are they able?” and “Are they mature enough?” You may even ask, “Are they deserving?”

For this reason, family businesses require special care in the buy-sell arena.

Very rarely is it a slam dunk that the kids are perfectly ready and interested in buying. Families that get the best results usually work with a family business program or a consultant who specializes in the graphic arts industry. A consultant like those on our expert team at LaManna Consulting Group can assess the readiness of your next-generation buyer.

We can also evaluate and potentially coach the family. We know that not every family can be coached or wants to change and improve. Those who do, however, tend to make great strides in family relationships, communication, and personal and professional growth. Along with that, the family’s relationship usually improves while moving through a structured succession planning process.

We find it’s even more so in a complex industry like specialty packaging.

As we prepare a family for succession in our industry, we look at sales, operations, management, and leadership. These are the big picture categories. Many selling owners also worry about things like equipment, real estate, inventory, employment contracts, intellectual property and patents, legal considerations, vendor relationships, longtime customers, and so on. Yes, these areas of business are important, but they tend to fall into place once we get a handle on the family’s readiness to handle the bigger issues.

As an owner, getting your concerns down on paper instead of swirling around in your head is part of that process. It allows you to view your family members in a systematic way instead of through a haze of worry.

I won’t deny that the scope of what a family business has to manage and know in our industry is vast. Preparing the next generation to operate, control, strategize, and lead can be daunting. Wherever you are in the process, we can help. And whatever your family makeup is, we have the experience there as well. We’ve worked with sisters and brothers. Husbands and wives. Widows. Parents and children. Step-kids, cousins, grandchildren, and extended families.

Personally, I like to see the next generation take on the task.

It’s powerful for a specialty print or packaging business to have a family legacy. Furthermore, it’s meaningful to the community. When I talk to people who run, for example, the local newspaper, a trade association, or a Chamber of Commerce, they tell me that family businesses are appreciated and known.

The tendrils that reach out into the community from family operations – especially those well-rooted over many generations – go deep and far. If you’ve wondered about the readiness of your family to enter into family coaching, you may discover that they’re more ready than you think. Whether you intend to keep your specialty packaging operation in the family or sell to an outside entity, your family will benefit from working on the business together.

Take a look at this resource from LCG,  “Succession Planning Simplified.” It can help you and your family begin those important discussions about what’s next.