It’s not easy stepping back from a business you’ve spent your whole life building. Not only is the company a source of income, for many entrepreneurs, it’s how they define themselves: innovator, leader, employer. Even a sale to a family member can be emotionally charged.
Over the years, I’ve seen many situations where the business owner managed to keep his or her feelings in check through the initial offer and the due diligence process, only to be overwhelmed by a sense of loss at the end. For even the most stoic, there’s no getting around the fact that this is an emotionally charged experience – at the end of the road, the business will belong to someone else. There are, of course, circumstances that can further exacerbate this. A few examples would include:
- Depending on the nature of the business, the most likely buyer might be a lifelong competitor (think Jay Pritchett and his nemesis Closets, Closets, Closets, Closets in the television show Modern Family).
- Concern that a family member is too young or lacks the skills to make the business work, putting in jeopardy the company, potential residual payments, and the parent/child relationship.
- A deterioration of the business’s market position over time, or the entry of a deep-pocketed competitor, leading to a forced sale.
Even in the most pleasant of circumstances, emotions can intrude on the process and may cause the savviest negotiator to leave money on the table. To avoid this, planning ahead may help. To start, admit to yourself that while the decision to sell may be a purely rational one, the selling process can be anything but. You may find yourself questioned on earlier business decisions, and second guessed on everything from your hiring policy to marketing and communications. This can further surface emotions.
It’s important to understand that the feelings that come with selling will linger long after the ink is dry on the contract. After years of solving problems, and managing mission critical decisions, you will have to look outside of your work for a sense of purpose and belonging. Think ahead to the first day after you close the sale. What do you envision yourself doing? Volunteering? Traveling? Spending more time with your family?
Another step to take prior to entering the selling market is to make sure you have a financial plan in place. Whether you expect a one-time windfall or a buyout over an extended period, you need to prepare for the time when the business will no longer provide you with income (and potential tax benefits). This, more than anything, may help you maintain peace of mind.
Selling can evoke a full range of emotions, from outright elation to a sense of great loss. In my experience, most business owners don’t really know how they’ll feel until they walk out the door for the last time.
The one feeling no one wants to have is regret – regret at having sold at a discount, or picked the wrong buyer, or failed to financially prepare. Keeping your emotions in check throughout the sale process may go a long way toward avoiding this, and putting you on the road to a happy and productive post-sale life.