In such cases, the best case scenario is one in which family members at least agree to try to extract as much value as they can from a sale of the business. Early in the process, Rawdin typically engages an investment banker skilled in and familiar with the relevant industry to consider potential buyers for the company.
He also helps the family prepare for a potential sale, drafting a strategic plan and capital budget, preparing clean financial statements and making sure the firm's record-keeping system is in order.
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He may also, depending on potential buyers, help prepare pro-forma financial statements reflecting possible strategic changes in the business.
The objective, said Rawdin, is to make it look like the family is running a responsible business and to maximize the earnings potential of the enterprise. "When you sell a business, you typically receive a multiple of earnings, so every dollar saved in earnings results in $7 or $8 more on the purchase price," he said.