When Your Family Can’t Agree About M&A or Exit Planning for Your Family Business

Family is complicated. It can be a source of joy and support but also immense drama and conflict. And while family businesses offer many benefits—a deep commitment to the company's success and often a more personal touch—they also bring many of the same challenging dynamics of family life to the business. So, when families can't agree on how to manage their family business or when to sell it, there's more at stake than just money. As a result, relationships can fracture, and the discord can sow discontent and dysfunction at the office, ultimately undermining the business.

So, what should you do if your family can't agree on the next steps for the business? Try these strategies.

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Separate the Family from the Business

Everyone must agree to separate family dynamics from the business to succeed at a family business. The family drama stays at home. If it doesn't, if it can't, then the family cannot run a business together.

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Ask People to Fund Their Fantasies

Family members tend to get emotional about family businesses. It's common for a few family members to have unrealistic fantasies, such as never hiring someone outside of the family or keeping the company in the family forever, no matter what. Rather than arguing about these desires, consider asking those who articulate them to put their money where their mouth is. For example, if the young brother wants the company to stay in the family name forever, he must invest as much money as it takes to achieve this feat. Otherwise, it's just a pipe dream. When developing operating agreements, families must keep this fantasy-making tendency in mind and ensure that key decision-makers are those with the most knowledge who have invested the most in the company.

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Address Underlying Dynamics

It's not reasonable to bring family conflict into the business. But sometimes, calling out these dynamics for what they are can be helpful. "Hey, you insist that you want Dad to do this to prove his love." "It seems like you don't want to let go of the business because you don't want to let go of mom." Reasonable people, when forced to confront these dynamics, often relent.

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Consider Mediation

Mediation is part therapy, part litigation. With a trained mediator, everyone can air their grievances, then work toward a resolution. And if everyone is to contribute to the cost of mediation, it can deter family members from dominating the discussion with hours of endless (and costly) monologues.

If mediation fails, consider escalating to binding arbitration. An arbitrator can work with all family members and make a crucial decision, much like a judge.