Reasons To Sell The Family Business Tend To Fall Into Three Categories
For those who have invested years of work, financial capital and often their identities in the legacy of their outdoor tourism business, letting it go can be very difficult.
For many, the decision to sell may be laced with guilt of letting down the family or failing to fulfill the legacy.
There’s a lot of reasons family succession isn’t the best option for some fishing & hunting lodges, camps and resorts, here are the three broad categories:
- Poor Family Dynamics
- Inability to support a viable business under family ownership
- Family Lacks Passion for the Business
Poor Family Dynamics
The job of operating a family-owned fishing & hunting lodge, camp or resort is often grievously complicated by friction arising from rivalries involving family members who hold positions in the business, or at least derive an income from it.
Unless the potential family successors face up to their feelings of hostility, the business will suffer and may even die in their hands.
If you see any of the following present in your potential family successors, you may want to consider an open market sale:
- Dissension within the family concerning the business is doing lasting damage to family relationships.
- Family members no longer speak to each other due to intense conflict over family business issues.
- Dissension within the family is destroying the economic value of the business.
- Next-generation owners are incapable of working as a team.
- Family members have come to resent the business due to the impact it has had on the family.
If any of these elements are present in your business, family succession doesn’t need to be completely ruled out but there will be hurdles to overcome in order for it to be a viable option.
Identify the family issues and discuss them openly. It’s funny how many family issues drag on just because both sides are too stubborn to discuss it.
We should note, however, that some families succeed in running businesses for decades surrounded by unresolved family dissension but the likelihood of this working in a hospitality industry like operating a fishing & hunting lodge, camp or resort is unlikely.
Inability to Support a Viable Business Under Family Ownership
Even if the potential family successors get along, it may be that preservation of the business is impossible under family succession.
If you believe the below scenarios apply to your business, you may want to consider an open market sale:
- If you believe that the next-generation owners are not capable of maintaining the culture and values of the organization, it may be best to sell to other owners who are.
- The business may not be able to compete in the current environment. If you have concerns that the problems your business faces are beyond the abilities of the family to manage, you may want to consider selling to someone who has the skills or resources to improve the business.
- The business may require a capital infusion to remain viable. If potential family successors do not have access to the capital necessary to maintain the business, either through additional equity from family or through debt or equity from other sources, then selling to someone with access to those resources may be best.
Family Lacks Passion for the Business
Fishing & Hunting Lodges, Camps & Resorts require a great deal of the owners’ attention, thus it is crucial that the owner maintain enthusiasm for the business.
One test of passion is to have potential family successors identify the benefits they perceive from operating the business because there are many. For example, I can’t imagine a better place to raise a family than at a fishing & hunting lodge, camp or resort.
If potential family successors cannot identify benefits beyond money that make the business worth keeping within the family, it is time to consider selling the business on the open market.
While this list is certainly not exhaustive, we hope it has given you some food for thought if you feel like you’re trying to “force” keeping the business within the family.
Below I’ll address some of the Benefits and “How To” sell your business on the open market if you have reached the conclusion that family succession isn’t right for your business.
Benefits of Selling in the Open Market
The sale of your fishing & hunting lodge, camp or resort business on the open market can actually be a great success for the family owners.
It can provide financial freedom to accomplish other goals, allow family members to truly focus on family and promote application of the family’s talents in other arenas.
The upside of selling your family owned fishing & hunting lodge, camp or resort business on the open market is you won’t have to feel guilty about asking for an amount that is above the value of the business.
As long as the business has potential to grow and make money, it is easy to ask for a sizeable amount of money if you can prove the business makes good profits.
If you were to sell the business to a family member and ask for a lot of money, it might offend them because you are part of their family and it’ll look like you’re just trying to profit off your connection to them.
This will create ill feelings between you and your other family member, which is something neither of you would want. So, if you want the potential to make a big profit off the sale of the business, then sell it on the open market.
How to Sell a Family Owned Fishing & Hunting Lodge, Camp or Resort
I promised at the beginning of this article to discuss more of the “How to” sell a family owned fishing & hunting lodge, camp or resort.
We’ve written extensively about the process of selling a fishing & hunting lodge, camp or resort and actually prepared an entire handbook on the topic so I will direct you over to this article for the “How To”.