It’s not easy stepping back and selling the business you’ve spent your whole life building. Not only is the company a source of your income, it also can be a part of how you define yourself: innovator, leader, employer.
“When the final moment of the sale arrives, many business owners often feel a sense of overwhelming loss,” says Barry Brundage, managing director, Private Wealth Management of U.S. Bank. “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.”
Even in the most pleasant of circumstances, emotions can intrude on the process and may cause even the savviest negotiator to leave money on the table. To make the sale the most successful it can be, planning ahead can help significantly.
With a full business-selling plan in place, you’ll be better prepared for the negotiation table. With a solid plan, you may have a better feeling about the overall experience.
Consider the selling market you are entering. Do you expect a one-time windfall or a buyout over an extended period of time? Work with a financial advisor to factor in the current sale to your future finances. A financial plan to prepare for the time when the business will no longer provide you with income may help you maintain peace of mind.
To start, know that while the decision to sell may be a purely rational one, the selling process can feel anything but rational. You may encounter challenging situations, such as potential buyers questioning your business strategies, your hiring policy or marketing and communications. Other circumstances that can further exacerbate your emotions may include:
• Your buyer might be a lifelong competitor.
• You may be passing the business to a family member who you are not certain is capable of continuing the business successfully.
• Your business’s market position may have deteriorated, forcing you to sell.
Anticipate that you might have negative reactions to situations that are part of the sales process. Recognizing this potential will reduce the possibility that you will be surprised or sidelined by your own emotions, and thus be in a stronger position to make better decisions.
You may have spent many years, or decades, building up your business. What will you do after selling your business?
“What many people don’t recognize is that emotions can continue to linger long after the ink is dry on the contract,” Brundage says. “After years of solving problems and making critical decisions, you will have to look outside of work for a sense of purpose.”
Plan for your future before the sale of your business so you have something to look forward to. Think about the first day after you close the sale. What do you envision yourself doing? Volunteering? Traveling? Spending more time with your family?
Having a vision of the future can fuel you with a sense of control and optimism, which can override negative emotions that might thwart the success of your sale.
Planning ahead can put you on the road to a happy and productive post-sale life. Who knows, maybe the next step is for you to embark upon a new business venture?
Explore more about successfully running a business.