The Wall Street Journal has an interesting short article, “How do I Pick a Successor?“, which contains some suggestions on identifying a new leader for your family owned business if you want to step down. While the advice is sound, I think the writer, Colleen Debaise, should have asked an additional question: instead of focusing on a successor and retaining ownership of the company, does it make more sense to sell the business?
Unfortunately, many businesses decline during a second or third generation of family ownership. There are a variety of reasons this may occur. Regardless of the reason, it may be better for the well being of the family to sell the business, rather than dealing with the family politics and financial issues of succession. It is not uncommon for a business buyer to retain well-performing employees who would like to continue working in the business, so a sale of the business doesn’t necessarily mean that family members will be without jobs.
