Selling Your Family Business? Process + FAQs Explained

If you own a family business, you likely poured your heart and soul into building it. Deciding to sell can be extremely difficult, both financially and emotionally. 

But there comes a point when moving on is the best thing—both for you and the business. Transitioning properly takes wisdom and care, but when done right, your life’s work can help your family for decades to come. 

In this guide, we’ll share some insider tips to help you make the tough choice to find a new owner for your business. With the proper planning and partners, the difficult goodbye ultimately leads to exciting new beginnings.

TL;DR - How to Sell a Family Business

Here is a quick overview of the key steps:

  1. Decide if and when to sell based on personal, family, and business factors.

  2. Prepare the business finances and operations to attract buyers.

  3. Determine business valuation and set an asking price.

  4. Market the business to find potential buyers.

  5. Qualify buyers based on vision, values, offer price, and deal terms.

  6. Negotiate deal terms and pricing to align with your family's goals.

  7. Work with legal and financial advisers to execute the sale.

  8. Plan for the family's future with proceeds post-sale.

Selling a family business takes thoughtful planning, difficult decisions, and trusted advisers. 

Exitwise can connect you with specialized M&A experts to guide you through the process. Contact us to speak with an advisor about the best approach for your situation.

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When Should You Sell Your Business?

Deciding when to sell your family business depends on personal, family, and business considerations:

Personal factors:

  • Retirement plans or desire for a lifestyle change

  • Loss of passion, motivation, or enjoyment in running the business

  • Health issues or burnout

  • Other interests and opportunities

Family factors:

  • Next generation's interest and qualifications to lead business

  • Family dynamics or conflict due to business

  • Family members' liquidity needs

Business factors:

  • Industry changes requiring investment, scale, or capabilities family lacks

  • Performance decline or inability to compete effectively

  • Favorable market conditions and high valuation opportunity

  • Attractive offer presenting an exit opportunity

If multiple factors align, suggesting a sale is optimal for you and your family; it makes sense to at least explore the opportunity.

There are plenty of statistics that illustrate the real challenges of family business succession and why many founders choose to sell:

  • Only about 3 in 10 family businesses make it to the second generation, which is still family-owned.

  • Just 1 in 10 are still owned and run by the family in the third generation.

  • Almost no family businesses exist in the fourth generation and beyond.

  • Family business leaders often stay in charge for 20-25 years. This can make it hard to adapt to big changes in their industry over time.

Given those daunting odds, many founders conclude that selling the family business is the optimal exit strategy.

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8 Ways to Find Buyers for Your Family Business

Once you decide to sell, finding potential buyers is essential.

Here are proven ways to spread the word that your family business is for sale:

1. Network with Your Industry Contacts

Tap into your existing network by letting industry contacts, vendors, customers, and local business leaders know you are exploring a sale. 

Discreet inquiries often uncover ideal buyers already familiar with your business.

2. Advertise in Trade Publications

You can place advertisements announcing the potential sale in industry trade publications and newsletters. This targets strategic buyers and investors focused on the space.

3. Attend Trade Shows and Conferences

Industry events allow you to meet potential buyers face-to-face to share materials and gauge interest while preserving discretion.

4. List Your Business on Online Marketplaces

You can list your business for sale on major online marketplaces, where potential buyers actively search for acquisition opportunities. These platforms offer national exposure and tools for buyers.

However, be aware these platforms often charge hefty fees, and buyers contacting you directly via the listing can reduce your leverage in negotiations.

Large indoor trade show with multiple booths and a crowd of attendees.

5. Explore Private Equity Firms

Private equity firms actively seek investment opportunities in family-owned businesses, providing capital and expertise for growth and eventual exit.

6. Offer Employee Ownership

In some cases, selling to your employees through an Employee Stock Ownership Plan (ESOP) or management buyout can be an attractive option.

7. Talk to Competitors or Customers

Key competitors, suppliers, or wholesale customers are often keenly interested in acquisition opportunities to consolidate market share.

They see the strategic value in acquiring your business.

8. Hire an M&A Expert with Exitwise

The best way to find buyers who value your family business appropriately is to work with expert M&A advisers. 

At Exitwise, we simplify the process by introducing you to top specialized investment bankers, attorneys, and other experts in your industry who can advise you.

Here's how we can help you maximize interest and your eventual sale price:

  • Introduce you to top specialized M&A experts

  • Help interview and compare your options

  • Negotiate optimal pricing and engagements

  • Continue advising you until your successful exit

Instead of leaving the buyer search up to chance, our M&A experts help you find the ideal buyers for your family business and can make all the difference in your valuation and legacy.

Schedule a call with an Exitwise advisor to discuss the best approach.

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How to Qualify a Buyer for Your Family Business

Not all buyers are created equal when selling your family business.

Here are essential criteria to evaluate potential buyers:

  • Shared vision and compatibility

    • Does their vision and plans for growth align with yours?

    • Do they share your values and priorities for the business?

    • Will they preserve your family legacy and retain key staff?

  • Offer price and terms

    • Do they meet your expectations for valuation and deal structure?

    • Can they really pay the proposed price with verified financing?

  • Experience and capabilities

    • Does their team have the skills, experience, and resources to operate the business?

    • Can they take it to the next level?

Vet buyers thoroughly and trust your instincts about fit. If you remain hesitant about handing over complete control, consider negotiating earnouts, equity rollovers, or retained stakes.

Find the right partner who will respect your family's legacy and position the business for continued success.

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How to Sell a Family Business

Once you've identified a qualified buyer, the next step is to navigate the sales process.

Follow this roadmap:

Prepare for Due Diligence

Get your records in order, including:

  • 3+ years of financial statements

  • Tax returns

  • Customer lists and contracts

  • Intellectual property documentation

  • Organizational documents (licenses, patents, trademarks)

  • Employee records

  • Insurance policies

  • Leases and any other legal agreements

  • Inventory, equipment, and asset details

Also, optimize operations. Clean up bookkeeping records and retain a qualified accountant to review and compile the last few years of audited financials.

Address any liabilities or risks that may arise. You want to demonstrate the business is in excellent operational shape.

Consider preemptively conducting your own detailed reverse due diligence exercise to uncover any problems early.

Businesswoman working on financial analysis with laptop.

Assemble an Advisory Team with Specialized Experts

Selling a business involves various complex legal, financial, and strategic factors. 

You need to work with an experienced team of advisors to guide you through the process, including:

  • Transaction attorneys to negotiate terms, draft contracts, and close the deal

  • Tax professionals to optimize the deal structure for tax implications

  • Valuation analysts to properly assess your company's fair market value

  • Wealth managers to plan for the future of sale proceeds

  • M&A advisers to market the business, identify buyers, and quarterback the process

At Exitwise, we specialize in connecting you to deeply experienced, industry-specific M&A experts. Our global network helps assemble ideal teams that maximize the outcomes of selling your family business. 

Get in touch with us to discuss your specific situation in detail.

Calculate Your Business Valuation

Work with a professional business valuator to determine fair market value based on:

  • Discounted Cash Flows: Calculates value based on future expected cash flow projections discounted back to today's dollars. Requires forecasting revenues and costs.

  • Revenue & Profit Multiples: This method applies an industry-standard multiple (4x EBITDA, for example) to your current or projected revenue or profits.

  • Comparable Transactions: Analyze what other similar businesses in your vertical sold for recently on a per revenue or profit basis.

  • Book Value: Totals all business assets, accounts receivable, intellectual property, and inventory and then subtracts liabilities. This more conservative valuation approach focuses on tangible assets.

Benchmark vs. actual offers to set an optimal yet justifiable asking price. Use our valuation calculator to get a starting point for your negotiation.

Monthly budget report with pie chart next to a laptop and glasses.

Negotiate the Deal

Negotiate the key terms of sale, including the valuation and purchase price, with guidance from your M&A attorney and other advisers.

Determine the payment structure - whether payment will be made in a lump sum, installments, earnouts based on future performance, or other creative options.


  • Discuss any desired post-sale involvement for owners in transition and advisory roles.

  • Negotiate non-compete agreements, consulting contracts, and other ancillary terms of the deal.

Structure the Transaction

Decide whether the sale will be structured as an asset sale, stock sale, merger, or hybrid based on tax considerations, risks, and other implications.

Work with legal and tax advisers to create the optimal structure for both the buyer and you.

Obtain Necessary Approvals

Before preparing the final documentation, you will need to:

  • Get formal approval for the transaction from any family shareholders or partners.

  • Seek consent from regulatory agencies, licensing boards, or other entities if required.

  • Notify and get buy-in from key personnel, management, and investors.

Team members engaged in a business meeting with data analysis on screen.

Finalize Documentation

Retain business attorneys to prepare contractual paperwork, including:

  • Letter of intent

  • Purchase & sale agreement

  • Non-disclosure agreements

  • Shareholder agreements

  • Employment and consulting contracts

Review all documents meticulously before signing.

Close the Deal

Once you and the other parties are satisfied with the terms and all conditions have been met, complete the closing process.

This involves the buyer transferring funds, you handing over ownership documentation, and executing any remaining formalities to seal the purchase.

Stay Involved During Transition & Post-Sale

Remain involved post-sale, work closely with the buyer during the transition period to train personnel, provide consulting, introduce customers/vendors, and share any other institutional knowledge. Make it as turnkey as possible.

Clarify roles and responsibilities to set proper expectations on both sides for how the transition will work.

Throughout the process, maintain open communication with all stakeholders, including family members, employees, and the buyer, to ensure a transparent and successful transaction.

Again, the best way to navigate the nuances is by working closely with experienced M&A advisers and legal counsel.

Corporate agreement sealed with a handshake at a wooden office table.

Challenges of Selling a Family Business

Despite careful planning, selling a family business poses some common challenges:

  • Emotional attachments

    • Letting go of your life's work and legacy is difficult

    • Change can impact long-term employees who feel like family

  • Navigating family dynamics

    • Satisfying the needs of multiple family members involves compromises

    • Successors may react negatively or compete for control

    • Family politics can lead to conflicts about the decision to sell or not

  • Getting top dollar

    • Time-consuming preparation is required to attract optimal bids

    • Valuation complexities arise when assessing intangible assets like brand value

    • Market fluctuations impact what buyers will pay

  • Relinquishing control

    • Transitioning leadership without your steady hand at the helm

    • Trusting buyers to preserve the family legacy

With patience and trusted advisers, these hurdles can be overcome for a win-win sale that will enable your family and business to thrive.

Detailed shot of hands working on a white keyboard, with a vibrant workplace backdrop.

Frequently Asked Questions (FAQs)

Selling a family business comes with many questions. Here are the answers:

Where Can I List My Business for Sale?

The best places to list a family business for sale include:

  • Online marketplaces

  • Local business brokers or M&A advisory firms

  • Industry-specific directories or publications

  • Your company's website or social media

  • Word-of-mouth outreach to aligned companies

How Do You Determine the Value of a Family Business? 

Valuing a family business is part art, part science. 

Key valuation methods include:

  • Book value based on assets minus liabilities

  • Multiple of earnings (EBITDA)

  • Discounted cash flow analysis

Industry metrics and recent comparables are also considerations. For best results, hire a professional business appraiser.

What Are the Benefits of Hiring an M&A Adviser for Selling a Family Business?

Benefits of hiring Exitwise to build your dream M&A team include:

  • Higher sale price 

  • Smoother process

  • Faster exit

  • Transition support

  • Efficiency and privacy

  • Insider expertise

Our expertise allows you to stay focused on daily operations during the process.


Selling a family business marks the end of an era yet opens new possibilities. The key is finding buyer matches who will take your life's work to new heights. 

This requires a methodical process aided by specialized M&A advisers. 

At Exitwise, we simplify everything by introducing you to pre-vetted deal experts tailored to your vertical and goals. 

These experts help you identify buyers who value your legacy, negotiate optimal terms, and advise you until the closing to ensure you make the right decision. 

So when the time comes to transition your business, contact our experts to ensure a smooth exit process that will lead to the next exciting chapter.

Brian Dukes.
Brian Dukes

Brian graduated from Michigan Technological University with a BS in Mechanical Engineering and as Captain of the Men's Basketball Team. After a four-year stint at Deloitte Consulting, Brian returned to school to get his MBA at the University of Michigan. Brian went on to join his first startup, a Ford Motor Company Joint Venture, and cofound a technology and digital marketing services agency. Through those experiences, Brian embraced the opportunity to provide M&A education and support to his fellow business owners as they navigated their own entrepreneurial journeys.

Find Your M&A Expert Today

Let Exitwise introduce, hire and manage the best, industry specialized, investment bankers, M&A attorneys, tax accountants and other M&A advisors to help you maximize the sale of your business.