Selling a business is more than just a financial decision — it’s also an emotional decision, one that can overwhelm even the most seasoned business owner. When you’ve owned and run your own business, it becomes a part of your identity. You’re not just selling the company, you’re letting go of a part of yourself.

Your team of advisers can help guide you through the steps necessary to prepare for the financial ramifications of selling a business. But you also need to pay special attention to the personal impact of selling a business.

Perhaps the most important factor to consider is the effect that the sale will have on your family — particularly if any of your children work in the business. How involved will your family be in the transaction? Will they personally benefit and, if so, are they ready for that responsibility? Should a governance plan be put in place to protect your family from this wealth?

Preparing your family for the money

In working with wealthy families, we’ve found that the best way to ensure that children and grandchildren are able to handle their family’s wealth responsibly is to get them involved in its management, provide them with financial education early and help create a forum in which they can make decisions together.

Begin by holding regular family meetings to define current needs, discuss common values and a vision for future generations. Make sure each family member knows his or her role and responsibilities and is willing to work together to come to a shared sense of risk and reward. You will also want to involve trusted advisers and fiduciaries that you have appointed in these meetings.

Ideally, these discussions should start long before the sale of your business and address important questions, such as:

  • How much will we need to maintain our lifestyles as we grow old?
  • How much will be enough for our children and grandchildren in the future?
  • Will our children and grandchildren be able to handle receiving our wealth?
  • How much will we want to devote to our charitable goals?

An important conversation

The answers to these questions will help drive your family’s wealth management strategy, which in turn will influence the type of deal you strike when you ultimately decide to sell your business.

What you learn in this process may help you answer more sensitive questions, as well. For example, you may need to decide whether a child who was active in the business should have a greater share of the profits than a child who was not interested in participating.

While the decision is up to you, the meetings may provide additional context for your choice and give you the opportunity to be transparent about your thinking on the matter. Failing to address such questions in an open and honest way could be an impediment to sustaining family wealth and promoting family harmony.

Outlining these objectives can be difficult, but diligent preparation in the present can set up smoother transitions in the future. As your family’s perspective on wealth begins to take shape, so too will your perspective on how best to manage that wealth.

What are some tips that can help you make a good business deal?

With your family’s needs and desires in mind, you can begin to make decisions about when and how to move forward with the sale of your business, and how the money you receive should be handled.

This material is not intended to constitute legal, tax, investment or financial advice. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation. Trademarks and logos belong to their respective owners.

Ron Ambrogio is the Ohio regional president for BNY Mellon Wealth Management and has more than 35 years of experience in the wealth management industry. He is a board member of the Northeast Ohio Chapter of the Alliance of Merger & Acquisition Advisors, as well as a member of the Business School’s Advisory Committee at John Carroll University.

Related post: Dealmaker Q&A: BNY Mellon’s Ron Ambrogio explores how a lack of focus can quickly derail the sale of your business