Hartford Business Journal

HARTFORDBUSINESS.COM | MARCH 9, 2026 19 FOCUS | FAMILY BUSINES S SMALL BUSINESS. BIG VISION. The ECSU-Liberty Bank Small Business Resource Center empowers entrepreneurs by providing free and accessible resources, education, and mentorship. UPCOMING PROGRAMS • Marketing Basics for Small Businesses • Writing a Business Plan • Housing Resource Fair • Small Business Matchmaker READY TO TAKE THE NEXT STEP? Email sbrc@easternct.edu or scan the QR code to learn more. S M A L L B U S I N E S S R E S O U R C E C E N T E R easternct.edu/sbrc Students & Faculty of the first Academy for Small Business (Oct. 14 – Nov. 13, 2025) The advisors and accountants at FML CPAs have helped family owned and closely held businesses thrive since our founding. Regardless of what your venture looks like today, FML has the expertise to help you nurture a healthy future. YOU CAN'T SPELL FAMILY WITHOUT FMLCPAS.COM | 860Š657Š3651 shoulder alone. That was the case for the Flanagans. By 2010, as global supply chains intensified competition, the family found it increasingly difficult to invest enough in equipment and infrastruc- ture to stay ahead. Several members of a third generation had taken roles at the company, but the family ultimately chose to seek an outside buyer — a move that marked the start of a multi- year process, Kevin Flanagan said. "If somebody thinks that they're just going to put a sign on the front yard and sell it next week, that's not the case, or at least not to get any type of return on it," Flanagan said. The family brought in outside consultants, who advised them to strengthen long-term contracts with jet-engine makers such as Pratt & Whitney and GE and make substantial capital investments. "We spent literally $10 million to get us ready for the sale," he said. "We leased a new building. We bought twelve new machine tools. We had a hiring spree because, knowing what the buyers are going to be looking for, this is all part of the process." Many family businesses under- estimate preparation, said Michael Carter, founder and managing partner of Carter Morse & Goodrich, a Southport-based investment bank specializing in small-business mergers and acquisitions. Advance planning has become more critical as private equity firms and other strategic buyers aggressively pursue founder-owned companies, Carter said. "There's five emails every day saying we'll serve up small businesses for you to sell," he said. "Private equity is being much more proactive, literally hiring people to be on the phone." That level of outreach can make a cold-call offer attractive on the right day — say, when a founder has a health scare or a bill comes due — but Carter said it's smart for businesses consid- ering an exit to do their own homework. "Are you prepared to go into the Super Bowl of transactions?" Carter asks. "Most of the time they're not, and they need preparation." That preparation often begins with determining what the company is worth. Many family businesses lack a clear valuation, which Carter says leaves them vulnerable to a lowball offer. He frequently advises owners who receive an offer to consider running a broader auction process to generate multiple bids for comparison. Preparing for a sale can be a lengthy process in other ways. It requires getting financials in shape, improving the business model, minimizing external risks, and in some cases professionalizing the management structure. Part of that process is also deciding what the family will look for in a buyer. For many closely held companies with long-standing employee relation- ships, cultural fit can carry as much weight as purchase price. In some cases, that leads to hybrid outcomes, with families retaining minority ownership while bringing in private equity capital. No regrets Figuring out what role family members will play after an outright sale can also figure into the negotia- tions. When Flanagan Industries was finally sold to a nearby competitor, EDAC Technologies, most of the second generation owners retired. But Kevin Flanagan stayed on. He also stayed on as EDAC was then sold, in 2019, to Korean giant Hanwha. He's now director of busi- ness development for the company's International Engine Business Group. The business he helped to build remains a standalone unit within the larger conglomerate. "When we owned the business, I used to lie in bed at night worrying about making payroll, and now I lie in bed at night worrying about making charts and graphs," he said. And he has something not every family business achieves: no regrets. "It's interesting to think that a company that my father and uncle started in 1946 with probably $50, in the basement of their mother's house, now has its DNA in a $70 billion Korean conglomerate," he said. How family businesses plan to transition ownership TRANSITION PLAN SHARE OF RESPONDENTS Pass to next generation to run 41% Pass to next generation to own (not run) 11% Sell to a third party 30% Other/undecided 18% Source: PwC Family Business Survey

• Cover