Selling A Business – Planning Ahead for Success
There is a huge psychological element in selling your business that you need to prepare for.
Selling a business is more than a financial transaction. There is a huge psychological element, too.
There is a psychological element. I think selling a small business is very much like selling a family home.
It’s one thing to sell a house. We can sell houses that we don’t live in, but the home is where we live. If you have lived in it and you’ve raised your family there and you’ve been there 30 years and it’s sheltered you all that time, there’s a psychological element there.
That’s true for businesses as well. And we really ought to recognize that.
It’s tough to detach yourself from the business. I know that when I sold my first business and I was breaking things up and moving it along, you feel like it’s a child.
You’re giving up context and customers and clients and space.
And purpose, pride and a sense of order in your universe. It is a tough transition.
If it’s any good at all, it has sustained you for the period of time that you had it.
So you’re giving up a good part of your normal world for a business with some success.
For these middle market businesses, there’s a pretty good income stream. And there’s a little Caesar at the top of each one who is expecting to run his world and have people around him to do the things that he wants to have done, and to be the center of things.
It very much defines who he or she is and, maybe they don’t even articulate it, but they are going to abandon some personal identity with that. That’s an obstacle.
With some business owners I have found, because they can’t envision life after the business is sold, don’t sell the business. It actually stops them from moving forward because they can’t even envision a post sale life. The glib answer is golf.
That wears thin after a short time. If that owner is before retirement age and yet retired without really a need to work, my view on them is 180-day specials.
They’ll play golf; paint the house; take a trip, do whatever they’re going to do. Before too long they’re fidgeting and looking around and trying to figure out what they can get into.
And about 180 days later they’ve bought something, or they’re invested in something, or their advising on something.
Over the years I’ve seen that pattern. The entrepreneurial instinct just can’t sit still. They’re not cut out that way.