Owners Advising Owners
The True Value of a Family Business When Selling or Buying
With Alex Méndez; an expert in family business with more than 20 years of experience advising family-owned companies in Mexico, Latin America, the United States, and Asia.
Did you know that more than 70% of companies in the world—and almost 90% in Mexico—are family-owned? Family businesses are much more than a statistic: they represent jobs, innovation, social cohesion, and, above all, the passing on of values and dreams across generations. Family businesses are the heart of the economy. However, when the time comes to either sell the company or acquire a strategic player, many families discover that the true value of their business is not solely measured in financial terms.
Of course, the numbers matter: profitability, sales, or market share are key indicators in any transaction. But in the case of family businesses, investors and potential partners look beyond the financial statements. What truly multiplies value does not always come up in accounting reports: family cohesion, clarity of shared vision, and the strength of the company’s governance structures that help them make better decisions, ensure accountability, require their teams to report, and be more transparent with information.
A divided family, with unresolved conflicts or without clear rules regarding its relationship with the business, can devalue even the most profitable company. A buyer or partner perceives the risk that, sooner or later, those internal conflicts will affect operations and continuity. In contrast, an aligned family that invests time and discipline in organizing itself transmits a powerful signal of certainty and trust.
This organization begins with a family council, a space where family members agree on clear rules: who can work in the company, how performance is measured, how differences are resolved, and how dividend decisions are made. This entity not only organizes the family’s relationship with the business but also showcases that the family is prepared for the future.
The next step is to have an advisory board or board of directors with external and independent board members. The presence of independent voices—with experience and strategic vision—sends an unequivocal message to the market: this company is managed with professionalism, transparency, and criteria that go beyond family interests. For an investor, this means the company is less vulnerable to emotional decisions and more capable of generating sustainable value.
It is no coincidence that strategic buyers and private equity funds ask as much about the governance structure as they do about financial results. A family that demonstrates order, maturity, and openness to external talent reduces perceived risk and, as a result, increases the value of their company. In many cases, this intangible factor weighs as much as—or more than—profits.
The process of selling or buying is not only a financial transaction: it is also an act of trust. The buyer trusts that the business will remain stable after the deal. The partner trusts that the family will know how to coexist with them in a fair and professional manner. And the heirs trust that, even if circumstances change, the legacy will remain alive.
That is why, when an entrepreneurial family thinks about selling or acquiring, they should ask themselves: what message are we sending to the market? That of a divided family with no rules? Or that of a united, professionalized family with long-term vision?
In the end, what is at stake is not only a business but the continuity of a legacy. Families that understand this—and work to align interests, build internal trust, and open themselves to the vision of external advisors—not only achieve more successful transactions, but also ensure that their story continues to be written beyond a sale or an acquisition.
Selling or buying is not the end of a family business: it is rather the beginning of a new chapter in its legacy’s history.
“Did you know that more than 70% of companies in the world—and almost 90% in Mexico—are family-owned?”