Selling a business is a roller coaster of emotions. If you are considering the sale of your business, prepare yourself for the many phases of emotion. Few will encounter all of them, but all will encounter some of them.
The Astonishment Phase
This phase starts when you realize you have a saleable business, and someone actually wants to give you money for your business – a LOT of money.
The Confusion Phase
You decide to proceed with a sale. If you are selling to private equity types, get ready for an entirely new and confusing vocabulary. No matter how confident you feel you are on top of your business, prospective buyers will ask questions you can’t readily answer. Don’t be surprised if you feel a little inadequate because you’ve never thought about some of the things buyers consider essential.
The Fear Phase
You look at an offer and wonder if it’s enough money? It’s a lot, but will it be enough to last you the rest of your life? You had uncertainties at times when running your business, but enjoyed a comfortable lifestyle, and the business was an ongoing venture. Are you making the right decision to give up your income stream for a fixed pile of cash?
The Excitement Phase
You get past your fear and accept an offer. This is the most exciting point in the process. You’ve got a deal done. You can count the money. It’s more money than you ever imagined you would see in your lifetime. You’re all the benefits of the sale in your head without considering the potential pain points.
The Guilt Phase
The longer you keep your intent to sell to yourself, the greater the guilt you will feel about telling your team. For most small business owners, their team is like a family. If it feels like you’ve been deceiving them, you have been. The best way to minimize guilt is to meet with the team at the earliest possible moment and be transparent. They will need to know what this means for them personally. Address their fears and reinforce the upside potential.
The Separation Phase
When you walk out the doors of your company (it’s no longer yours) for the last time, it will be extremely difficult. For most business owners, the business is part of your identity. Now, it’s gone. There’s no disguising the difficulty of the final separation. It’s both painful and necessary.
The Uncertainty Phase
Unless you worked with a financial planner and planned well, life becomes a bit uncertain. You may not have fully considered the impact of taxes on your sales proceeds. Your business identity is gone. What’s next? Many owners haven’t figured out what comes next. This can lead to frustration and regret.
Bottom line: consider hiring and working with a financial planner that has background and experience in dealing with owners exiting their businesses. An experienced planner can help reduce some of the fear and uncertainty. They will ask you upfront if you have figured out what comes next. They will continue to ask you this throughout the process. The planner will coordinate the tax and legal support so that the numbers Work for you and your family. Don’t try to go it alone or with only minimal support.