Many first-time entrepreneurs find themselves overwhelmed and under water – not financially, but emotionally – when it comes to selling their business. What should be a fruitful and exciting process, and completion of life-long work, often turns into an emotional mess – a disaster few, other than other entrepreneurs, will ever understand.
Many surveys have been done on the key elements associated with a sale and the preparation thereof. Many points come to mind:
- Work ON your business, not IN it
- Why did you start the business to begin with? What is the purpose of the business and even your own purpose in life?
- Plan early – 3-5 years before a sale if you want to optimize the businesses value
- Have you created a “lifestyle business” or a “value business” with long-term purpose and legacy?
- Is where you are today, running a much larger business than you set up, really where you want to be?
- What is life like, after you sell?
Those are just a half dozen examples that anyone working with you on your business will bring to light…and should bring to light. And they are all valid. Pertinent. Necessary.
But how about exploring the following:
- What is seller’s remorse like? And when does it kick in? Will it kick in?
- How do you re-channel what has made me successful in the business into other aspects of your life after you sell?
- Will you ever really be prepared to sell your business?
- What are your expectations and anticipated feelings as and when you sell the business? Relief? Success? Remorse? Confusion? Depression?
- Are you ready to ask yourself and my team the tough questions to make a sale more valuable? More attractive?
- How does emotional intelligence, change management, self-awareness and mental wellness (or maybe not so “well”) play into the sale of the business – during and after the sale?
For most of Gen X’ers and Baby Boomers, the sale of the business may be the culmination of a lifetime of work, emotional ups and downs, and most importantly – a sense of purpose and well being.
For younger generations (Millennials, early stage X’ers and soon to be Zoomers (Gen Z’ers), this process may happen many times over their career. Meaning their attachments and life’s work is not synonymous with building one business, but rather the serial entrepreneur mentality of start-build-sell becomes their challenge, not the business itself.
I must caution you to always remember your audience when buying and selling – respect the process and the values. When buying from an entrepreneur who is a lifetime owner of the same business, you must recognize that the process of selling is akin to “empty-nesting” when your kids move out – part of them will be lost, emotionally fragile and often unrealistic. When buying or selling from/to a serial entrepreneur, remember the business is likely a conduit, means to an end, and they are not vested in THAT business the same way a long-time owner is. Playing on the emotions of a serial entrepreneur can be frustrating at best, futile, pointless and a losing endeavor at worst.
No matter who you are – the following 3 keys to success that I have time and again seen be the reason for successful entrepreneurs are what needs to be taken into account:
Defining these in the context of your business, your persona and your sales plan, and how you will live your life after selling, will prepare you for sale as much as the traditional metrics proposed by just ordinary financial advisors.If you have any questions about how to prepare for the sale of your business, please do not hesitate to contact one of our Family Business consultants.