It’s time. You’ve worked for years to build your business, to make it into something you’re proud of. And now, you have an offer to buy your business. You’re prepared for the required financial disclosure, but the emotional swings during the process may surprise you.
Your first surge of emotion is – justifiably - exhilaration. All the hard work has paid off. You’re able to take some time off (finally) to enjoy your family and unwind. An interested and qualified buyer is validation that your business is valuable, that your vision has been achieved. Caution: This joyful phase won’t last forever.
It won’t be long before the “what if” phase sets in. What if your employees are angry about the sale? What if your longtime customers are unhappy? What if the new owner doesn’t run the business the way you did? What if retirement isn’t all it’s cracked up to be? What have I done? These questions are normal as you begin to assimilate what will be your new reality.
You may also experience anger and frustration during the negotiation process. No matter how much you both want the deal, the sale process reveals that you and the buyer will have some competing objectives. Every time the other party discounts the valuation or tries to grind out another concession, the frustration and maybe even some anger may grow. How dare they doubt your word? Who do they think they are? Who do they think I am?
Alan Austin, President of Mt. Vista Capital, says this is where an experienced broker can help you manage your expectations and your emotions. “There’s a reason that 90 percent of business listings never close. It’s not uncommon for an owner to merge the value of the business with his emotional investment. It’s our job as advisors to help both parties stay focused on the issues and the negotiation - not what they’re feeling about the process.”
No matter how rational you think you are, emotions can frequently take over in the heat of the moment. Losing sleep, spending all night ruminating over your decision, overthinking the details, and grinding your teeth will eventually affect your health. It’s natural, but not helpful. You might consider opening up to a friend you trust, someone with common sense who can provide support without judgment. But at the end of the day, a competent broker can talk you through all of the issues, explain both sides of an issue and help you find common ground. t’s not surprising that many business owners feel grief after selling their business. Even if you were ready to move on, you’re bound to feel a sense of loss It is not unlike the emotions experienced by many executives when they retire. You’ve given up your daily routine, your sense of identity, your passion project. It’s like ending a marriage or losing a spouse, and you shouldn’t be surprised if you find yourself feeling a little bit of a loss.
Austin describes the feelings this way: “Most owners have a strong personal connection to their company. …If they built the business from scratch, they might liken that process to parenting – nurturing the company through sleepless nights, protecting it from threats, helping it recover from illness, constantly leading and nudging it in the right direction, and preparing it to survive without them. Regardless of their motivation in selling, they will likely revisit that motivation and second-guess their decision over and over, up until, and probably for a time following, the closing.”
Don’t forget that you might not be the only one riding this emotional rollercoaster. Your employees are facing an uncertain future with a new owner they just met. Your family is going through it all with you, including the sleepless nights and mood swings. Even if they’re happy that you’ll have more time for them, they’re still not sure how that will play out. They may also have their identity and self-worth tied up in your business, making this a loss for them as well. You’re changing their lives at the same time you’re changing your own. You’ve got to give them time to process their feelings as well.
Finally, you accept the Letter of Intent. And then, you’ll have time to think through what you really feel. You can be proud of what you’ve accomplished. You can start to think about what might come next: another passion project, investing your time for a good cause, or that trip to Europe you’ve been talking about for years.
Take a deep breath. Exhale. You’ve earned it.
Resources:
https://www.forbes.com/sites/richardparker/2016/10/24/the-business-for-sale-marketplace-why-90-of-listings-never-sell/?sh=720860016d85
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