I have family members working in my business. How does that work?

The question we’re going to explore today is: “I have family members working in the business. How does that work?”

It is a great question and one that we answer quite a lot. Most of the owners that we’ve talked to are family-run companies. They’re great when you’re operating a business, but when you’re preparing to sell a business to another owner outside of the family, it can really hurt your valuations—here’s why: 

“Most buyers are concerned about confidentiality.”

If you have family members working in the business, it is important to have a conversation with them early on as you’re prepping your business for sale to determine if they intend to stay in the business post-close. If they have plans to leave, you want to consider replacing their position before you go to market. If they prefer to stay on with the new owner, they will need to sign a non-compete and a non-solicitation. This will address some of the biggest concerns that buyers have regarding family members working in your business. If not, it could potentially devalue your business and buyers may get nervous and reconsider their offer.

If you would like to discuss your family business, please visit us at RBAsells.com. We look forward to connecting with you.