Buying a business with family still working in the business

July 15, 2024

by a searcher from Harvard University - Harvard Business School in Austin, TX, USA

Hi all
I am in the due diligence phase for a company where the IT guy is son in law of the owner. I'll probably be outsourcing the IT support which mean this guy is going to lose his job. Sellers daughter also does part time work there - which, i haven't given much thought on
How should I handle this situation with the seller? Seller will be carrying a note - not that he'll have a say in my decision but hey he might just go crazy and increase the rent of the facility on me or whatever.. I want no drama and no family in the business tbh..

Reply by a professional
from University of Michigan in Detroit, MI, USA

I agree with the earlier posts. This is a conversation you should have upfront. I always tell my clients that the seller also has to be your best friend. You'll rely on him post-close. Also, there is almost always an amicable solution. I've worked with clients who have agreed, for example, to keep family members employed for several months post close to give them time to find another job. Hope that helps. Let me know if I can be of anymore help. DM me here or reach our at redacted

Reply by a searcher
from University of Southern California in Tampa, FL 33602, USA

If you are already planning on cutting them AND don't want family in the business, I'd argue better to be transparent now prior to close to avoid any of that. Don't need to explain yourself outside of it being a business decision.

+2 more replies.

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