Selling a Family Business – How to Avoid Arguments
Selling a company that you built for 12 years is not just a transfer of shares at a notary. At Consilium Krasiński, we often see siblings sitting at the same table who haven't talked about anything other than the division of assets for 6 months. To be honest, without hard rules and an impartial look, such conversations end in a row after 15 minutes.
Emotions on the negotiation table
Most business owners in Lodz and the surrounding area treat their business like a third child. When a buyer appears, especially a large player from abroad, it suddenly turns out that the price on paper is only half the success. In 2023, we helped a family transport company where the father wanted to sell shares, and two sons had completely different views on how much their workshop and 14 trucks were worth. One of them had worked 3,200 hours there last year; the other only appeared at board meetings once a month. This creates a natural sense of injustice that no Excel will solve without the right approach.
During negotiations with a foreign fund, emotions are the worst advisor. Foreign analysts look at figures from the last 31 months, and the family looks at how many nights they haven't slept to make sure the company survived the crisis. We at Consilium Krasiński sit at the table with you to connect these two worlds. We tell it like it is: the buyer doesn't care about your sentiment for the first production hall in Zgierz. He cares about EBITDA and whether the company will fall apart within 4 months after you leave. We must prepare arguments that turn these memories into concrete market value.
The buyer doesn't care about your sentiment for the first hall. He cares about pure profit and transaction security.
Valuation that cools heads
The first step we take is an audit typically lasting 12 to 18 business days. We don't do this to point out mistakes, but so that everyone in the family knows where they stand. In March 2024, we did such a valuation for a small plastic processing plant. The family thought the company was worth 5.2 million PLN because that's how much they had invested in machines over the last 7 years. Real market valuation showed 3.8 million. This was a critical moment. We had to explain that depreciation and changes in the German market realistically lowered the value of their assets by 23%.
When a family gets a report in their hands that has 42 pages of hard data, the conversation stops being emotional and becomes technical. Instead of arguing about who was more important, the siblings start talking about how to improve the margin over the next 6 months to bump the sale price up by that missing 400,000 PLN. Such an approach saves not only the transaction but also Sunday dinners. It often happens that after our audit, owners decide to wait with the sale for half a year to tidy up employee documentation and close 3 old legal disputes, which realistically increases buyer security.
The role of a mediator in the succession process
At Consilium Krasiński, we are not just about counting money. We often serve as a buffer between conflicting parties. I remember a situation from October 2023, when we served a development company from Pabianice. A couple in the middle of a divorce had to sell their joint business. If they had talked directly, the transaction would have failed after 2 days. We took over communication. We set a clear schedule: 2:00 PM meeting with the husband, 4:00 PM meeting with the wife. Only when we had a common front on the key 7 points of the contract did we seat them together with the investor.
Without legal jargon, we explained to them what would happen if one side started blocking the process. Provisions in preliminary contracts can be ruthless. The contractual penalty for breaking off negotiations at an advanced stage could in their case have amounted to as much as 120,000 PLN. This was a concrete argument that made personal animosities fade into the background. We focused on the goal, which was exiting the investment with capital that would allow everyone to start anew. This is exactly what we call guarding your interests – we look where you, blinded by emotions, might not see a threat.
Preparing the company for exit
A foreign investor, before transferring the first tranche, will check every binder in your office on Piotrkowska. If there is a mess in the HR documents, and 12% of supplier contracts are unsigned, the price will drop faster than you can offer coffee. We enter the company 3 to 5 weeks before the official start of sales. We clean up. We check if all software licenses are up to date and if anyone forgot to pay property tax for the last 2 quarters. These are details that build credibility.
Last year, while selling a logistics company, we found a gap in warehouse space lease agreements. One annex from 2021 was missing. It seems a trifle, but for a buyer from London, it was a lack of the right to use 1,500 square meters of maneuvering yard. Fixing this error took us 4 business days. If the investor had found this during Due Diligence, they would have likely demanded a price reduction of at least 150,000 PLN, arguing operational risk. Hard facts, not promises — a company prepared this way sells for 11% more than one taken 'on the fly'.
A mess in documents is the easiest way to lose 10-15% of the company's value when selling.
How to talk to giants?
When a corporation that has 5,000 employees and 12 lawyers sits on the other side of the table, a small company owner from Lodz may feel overwhelmed. They use difficult words and complicated tax structures. Our task is to be your translator. If they talk about 'representations and warranties', we tell you directly: 'They want you to be liable with your own assets for 3 years if some old debt comes out'. We help negotiate terms so that after the sale you can actually rest, and not tremble at every phone call from the new owner.
In July 2024, we were closing a transaction for a food industry company. An investor wanted to keep the owner on the board for the next 24 months without the right to a dividend payout. It was a trap. After 6 hours of negotiation, we shortened this period to 9 months and fought for a knowledge transfer bonus of 85,000 PLN. We sit at the table with you until the end. We are not afraid to say 'no' to a big fund, because we know your company is real value, and not just a position in their investment portfolio. Remember that in these talks, strength doesn't depend on the size of the company, but on preparation and peace of mind.
