What should be the first objective for a family-owned business planning to sell?

Obtaining a valuation from a finance expert is a crucial first objective for a family-owned business planning to sell for several reasons. A proper valuation provides an evidence-based estimate of the business's worth, taking into account its financial performance, market conditions, and potential for future growth. This assessment is vital for setting a realistic price that reflects the business's value in the market, attracting potential buyers, and ensuring that the owners do not undervalue or overvalue their business.

By understanding the valuation, the owners can make informed decisions on how to position the business during the sale process, establish negotiation strategies, and understand the tax implications of the sale. This foundational step lays the groundwork for all subsequent actions in the sales process, allowing the owners to approach the market with confidence and clarity.

Market aggression, selling to a family member, and reducing operational costs may all be important considerations, but without a clear understanding of the business's value, these actions may miss the mark or even lead to adverse outcomes. Having a solid valuation is thus essential for successfully navigating the complexities of the M&A landscape.