Recently I have been involved in a lot of conversations with my clients about either selling their business or buying another business. Selling your business is a stressful and emotional process and should not be based on someone walking into your business and making an offer to buy your business. There are several considerations and the first one is to consider “Why are you selling your business?” That is the question that seems to not be fully considered by the business owner.
I would like to recommend a great book “The Art of Selling Your Business” by John Warrillow. John’s book provides guides a business owner through the selling their business to avoid costs and the steps to allow one to prepare to travel this confusing and emotional journey.
In Section One, Chapter Two the question is asked, “What is driving your decision to consider selling?” Let us consider the answers: “I want to retire”, “I am tired”, “Bored”, “Burnt Out”, “Sick of dealing with employees”. Does this sound familiar? All of these are legitimate, but if these are you only reasons you may regret selling your business. Business owners find reason and purpose in their businesses. It takes hard work and lot of sacrifice to build a business, but we know that every journey ends.
Do not let the things that are frustrating you “push” you out of the business rather getting clear on what are the “pull” factors that excite you. You want to be look back on owning your business with fond memories and have no regrets.
I listened to a podcast interview with Bo Burlingham about his book “Finish Big”, he defines there are five good qualities of a good exit:
- At the end of the process, a business owner feels they have been fairly treated and appropriately rewarded for all the hard work of building a business.
- A seller can look back with a sense of pride of what they did as a business owner.
- The seller has a peace of mind of what happens to those people who were part of the business and their continued success.
- One finds a sense of purpose outside of owning a business.
- In some cases, it is important to continue to see the business thrive without the owner.
Even though the financial part of selling a business is very important, the emotional part is equally important and usually does not raise it head until after the transaction has been done. Burlingham states, “50% of the sellers are happy but 50% of the sellers are miserable.”
A business owner needs to begin their exit strategy early in the business forming years. Before you sell your business begin to understand how, why, and when is right for you.