businessThe Netflix original series Bloodline allows viewers a voyeuristic perspective into the inner running of a family business. And at least in the show, it is not pretty. I have had numerous experiences in the past putting together mergers and acquisitions, and then implementing integration plans, but when locally-owned family businesses were involved, I knew that there would be a few additional levels of challenges. To be clear, organizing deals with regional and independent companies is very rewarding—I just need to remind myself that there is often an emotional component present in the proceedings.

When a family decides to part with their business, it makes perfect sense that they feel attachment. Often, these companies are decades old, and the owners have vivid childhood memories of watching their grandparents conduct day-to-day operations. Sometimes I hear stories about how the business originated, and how it almost folded (twice!), and how over the years bigger companies intended to swallow it up—but never did. Just by listening, I always learn something interesting about how the business has operated and succeeded.

Sometimes, though, the family has lost its attachment to the business, and simply wants to move on. Worse yet, there are times when only some family members have lost the emotional connection while others are still holding on. It can be complicated if there are four siblings, and only three want to sell. Or if the family’s personal bookkeeping and financials are inscrutably mixed up with company business records. It is also possible to see a family-run business doing very well, and as result, the owners may not understand how to properly place a fair valuation on it and end up with an inflated and unreasonable asking price.

And I have not even begun talking about what could happen if one family business intends to purchase a competitor run by another family in the same geographical area. There could be rivalries, secrets, and old scars. The bottom line is that it takes time and energy to investigate, communicate, perform due diligence, negotiate, and close any deal between any two enterprises, but when families are involved, they are usually unable to do so on their own without suffering significant and unnecessary pain.

The Sumus team can help either side in a family-owned entrance or exit. We listen as you explain the “why” and then operate on the timetable you choose. We can help you “clean out your closet,” as we have experts who can investigate and clarify your records, and separate them from personal assets. We research industry multiples, have tools (such as our SVE), contacts, and experience to be able to arrive at an accurate valuation of a business at any given time.

Check out Bloodline if you want to see an entertaining dramatization of everything that can go wrong, and then call Sumus for real-world advice and assistance.

Jim Baker

Jim Baker

Sumus was founded by Jim Baker, an entrepreneur with 27 years’ experience bootstrapping and growing his business organically and through acquisition, to share his experience by providing advisory services around Board representation, Organization and Branding Strategy, Mergers & Acquisitions, Value enhancement and Exit strategy.

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