Several weeks ago I posted an entry on who you need on your team when you’ve decided to sell your business. There was one major part of the exit planning process I missed. It was what’s next or why you want to sell your business.
It’s easy to decide what we want to do and it’s often even easier to decide how we’re going to go about doing it. This is especially true when you’ve assembled the right team, but it’s much harder to be happy with the entire sales process without having a clear understanding why you want to sell your business.
The first answer for why you want to sell your business is usually enough for many people. When you only answer this question once you will have a pretty good chance of ending up with sellers remorse. Instead you should force yourself to answer why five times. This will help you to drill down and understand why you want to sell.
Understanding why will help you stay away from seller’s remorse. You might even find that selling, or selling in the manner you were going to, won’t work for you. Seller’s remorse happens for a variety of reasons. Some of them are:
- You didn’t get enough money from the sale of your business and are forced to go back to work.
- You didn’t know what was next in your life and you’re really bored with what you’ve been left with.
- You are really unhappy with how the buyer is treating your customers, employees, the community, or all three.
- You aren’t being paid the money you’re owed from the earnout portion of your sale.
- You have gone from being a big deal in your industry to never having the phone ring.
Even worse for many owners is having a deal fall apart before closing because they haven’t considered the items above. You may have gone through a tremendous amount of work in finding a buyer, but at the last minute you decide not to go through with the transaction.
Business intermediaries tell us many times a sale falls apart right at closing because the owners have not been properly prepared for life after the business is sold. Preparing yourself for an eventual exit from your business starts with having the right mindset to leave your business. You should add a member to your exit planning team that specializes in this part of the planning process.
The folks at The Next Transition do a great job of helping owners get ready to leave their business. If you don’t talk with them you should make sure you hire advisors who understand seller’s remorse and can talk intelligently about the issues that you face when it’s time to leave.
Proper pre-planning is essential if you want to transfer your business to others. Don’t be one of those who sells their business and then spends the rest of their life wishing they hadn’t.
We have put together an Exit Planning Assessment that allows you to understand that value of your business. You will learn how others look at your business when it’s time for you to leave. If you aren’t interested in selling your business today, you should still know what others think of the enterprise you’re building. For more information on this report click on the button below.