Handling the emotions of selling a business
It’s no secret that 2020 been challenging with COVID-19 very much a part of our lives now. Thankfully, despite all of the upheaval, to me, it seems that there is an air of ‘business as usual’ starting to creep in as restrictions are starting to lift slowly, cases are dropping in Australia and a vaccine is on the horizon. Whether your business is open or closed, I’m sure you’ve been given some time to think about your future and what you might want to do after the present situation has passed. One of these thoughts might be about whether or not to sell your business.
For some, it might be about closing a chapter, moving on and trying something new. For others, it might be for financial reasons or just simply the ‘right time’ to sell. Either way, if you are ready to sell now, or considering a sale in the near future or beyond, please prepare yourself – both in a practical and emotional sense.
Emotional? Over the years one thing I’ve found is that many business owners aren’t prepared for the emotional impact of selling their business – initially, they see it as a straightforward business matter. But, as they go through the selling process (which can take many months), feelings emerge and emotions are triggered. So how do you handle this? Here are some points to consider when preparing for the emotional rollercoaster of putting your business on the market.
Have you got your paperwork in order?
Get ready for prospective buyers to pour over and scrutinise every inch of your business. They’re coming in expecting full transparency and if you don’t provide it, may walk away from the deal. And, while it might seem simple, I’ve witnessed business owners scramble at the last minute trying to get all of their paperwork and accounts in order.
To give you an idea, a prospective buyer will want to see all your financials, accounts and taxation documents. They will also request to see all your employment contracts, customer contracts, leases and other legal documentation. You’ll be asked to disclose any historic legal issues. It’s imperative you do your own pre-deal due diligence, and try and identify and resolve any such issues – that way you will disclose a problem and its solution. The better prepared you are, the less stressful the selling experience will be.
Consider your employees
How many employees do you have in the business? Have you considered what may happen to them when you sell? Some owners might want to keep the deal quiet, but that can be difficult – if you’re suddenly asking your team to provide copies of all contracts to lawyers, staff may wonder what is going on. I’ve worked on many deals where the sellers would go into the office at weekends to access files for the purposes of due diligence, all to keep the deal secret. And, even then, you may have prospective buyers wanting to inspect the premises.
So what do you tell your staff and when? If you’re planning to reveal everything once the sale has been completed, be prepared. You may need to tell white lies and, for some, this can take an emotional toll, particularly if you have a great relationship with your team.
Or, you may want to be transparent from the get-go and explain that the business is on the market. If this is your approach, do so with caution. Your employees will understandably feel a sense of uncertainty and trepidation whilst going through the sale process and, especially in the current environment, will be worried about job security.
Riding the transitional period
There’s going to be ups and downs, offers made, offers turned down and prospective buyers walking away. I can assure you, you’re going to feel a variety of emotions – there’ll be the highs when you’re told how much your business is worth and when the sale finally comes through and you sign the dotted line. However, there may be lows when you have to reject an offer or a sale falls through. You may experience ‘the fear of letting go’ or a feeling of being overwhelmed. However, during the sale process, it’s imperative to remain pragmatic and objective.
I have to agree with Mike Handelsman of BuyBizSell.com who, in an article for Inc, suggests outsourcing some of the selling functions – “the added benefit of outsourcing specific seller functions is that professionals bring objectivity to the process so that interactions with prospective buyers are based on facts, not emotions”. That’s something you’ll need throughout the whole experience. Get a good support team and use them!
Deal done, what’s next?
You may experience a grieving period. It may sound silly, but if you started your business from scratch, poured your heart and soul into turning a profit, it can be difficult to let it go. After all, it was your baby and might’ve been extremely close to your heart.
For some entrepreneurs who are deeply invested in their business and team, selling can feel like you’re giving away your family. According to Jeff Giesea of the Harvard Business Review, there’s an emotional journey that you go on after you sell – “when you spend years architecting your life around a business and suddenly it’s gone, you’re probably going to have an identity crisis and some postpartum depression”. Giesea suggests a range of things owners can do to keep themselves optimistic. He suggests reaching out to other business owners in your networks who have gone through a sale process, potentially working with a coach as well as having a six-month game plan in place once the contracts are signed.
Either way, it’s good to have an idea of what your next steps are, otherwise you might find yourself experiencing ‘seller’s regret’.
Are you ready to sell your business?
I’ve been doing this for nearly two decades. I’ve advised buyers and sellers and I understand what selling a business entails, and the emotions involved. As I mentioned above, a good support team is vital and I can assist you throughout the selling process. If you’re thinking of putting your business on the market soon, please reach out. I’d love to help.