February 23, 2021 //
Steps to Selling your Business Part 3.
You are giving serious thought to selling your business but are in uncharted territory. In this series, we have already identified several important points to consider before you initiate that process. However, you should think through this process strategically with an expert Mergers and Acquisition (M&A) advisor who can provide you with the support and analysis needed to optimize your sale results.
In the weeks ahead, we will look at some of the critical factors you need to know as you enter the preparation phase of selling your business. Before we get to that, you need to settle two more questions before you begin.
When you sell your business, you might agree to a transition period or you might just stay home. Whatever the case, what happens when your alarm goes off (or doesn’t) that first morning when you don’t have to go to your office? You have worked countless hours building the success of your company; the sale process itself will have put more demands on your time, not less; now you begin a day with no agenda. Are you prepared to have an open calendar for the first time in years?
When that day comes, what do you do? There are only so many rounds of golf, so many tables you can make in your workshop, and so many people you can visit before you start asking yourself whether you have done the right thing. It is far better to face the question of what’s next, now.
Make sure that you build rewards for your work into that plan. However, you must also stay productive in life-after-your-company. That may mean partnering with old colleagues, starting a new business, or working with a charity or NGO that aligns with your passions. Whatever it is, start dreaming about it now and make a concrete plan; you cannot simply live on the golf course.
Integral to answering this question is the truth that you still have great value and worth as an individual. Who you are as a person and your value is not dependent on whether or not you own and run a business.
It may sound old-fashioned, but I consider this a critical question. This is not a side issue designed to keep peace at home; it’s a practical matter. This is a central question to your well-being after the sale.
Years ago, I was talking with Jim, the owner of a successful building materials company.
We were close to officially engaging in the sales process together. All that was left was his signature to get things started.
Jim left a meeting with a promise to sleep on it and settle things in the morning.
In the morning he called to tell us that he wasn’t selling after all.
Why? He talked with his recently retired wife.
She told him in very clear terms that she wanted some downtime now that she had retired and she wasn’t ready to have him permanently home until she had better settled in this new stage of her life.
It was absolutely the right decision for them. That settling period lasted a lot longer than I ever imagined – it was 15 years before Jim engaged us to sell his company.
Together, you have walked that long road of owning and running a business. We all know that this is not always an easy path to travel. You have reaped the benefits together, but you have also both sacrificed dearly for them together. Including your spouse in the discussion and listening to what they have to say is an acknowledgement of that partnership.
It reminds me of that ancient question “how can 2 people walk together unless they are in agreement”. I believe that couples need to agree before this process gets underway. You have walked together to get this far, and it is a road you will continue to be on together afterwards; make sure you are united.
If you don’t have a spouse, perhaps it’s a family member or best friend who has walked this journey with you. I would encourage you to seek their opinion and listen to what they think. They have seen you through the good times and the bad, and they have your best interests at heart.
In the face of all the numbers and hard data you will be working with throughout the sale process, these questions may seem secondary, or even frivolous. But I urge you to begin here, nonetheless. Your mindset is a critical factor in any negotiation process. It is essential to come to the table with the end in mind. The decisions you make at the negotiating table impact not only your life but the life of your family and community as well, which starts with the principle ‘know thyself’.
As you read through this series, you will see the complexity, nuances, and subtleties in selling your business well. Experience does matter. Having your family and an expert M&A advisor walking closely with you is vital to achieving the best outcome.
In the next installment of the series, we will begin to journey through the preparation phase for selling your business and discover the value behind your numbers.