Selling a company is an incredibly difficult, confusing, and time-consuming process, especially for first-time entrepreneurs like myself. It's a complicated journey with numerous intricate steps, potential pitfalls, and tricksters along the way. The hard truth is, selling a business you've built is emotional. Feelings of guilt, attachment, loss, and uncertainty are natural given the immense commitment required for success. This post is part of a series where I hope to share lessons learned and over a decade of experience navigating the M&A world since selling my first business in 2011.
As a first-time business owner, that first sale was a defining moment professionally and personally. It was an emotional rollercoaster riddled with doubt and conflicting feelings. On one hand, there was immense pride in having built something from the ground up and seeing it become successful enough to attract buyers. On the other hand, the thought of letting it go was unsettling and included a surprising and profound sense of loss. The business had been “my baby” - I nurtured it, sacrificed for it (floated payroll myself in the early days) and poured everything into if for almost a decade.
Doubts inevitably crept in – was I making the right call? Would I regret this decision? How would the sale impact our clients, many of whom had become mentors or friends?
There was unexpected fear and guilt about the effect on employees who had been there since day one, some even becoming like family. Our team's incredible contributions made that success possible. The company’s success could not have been achieved without the incredible contribution of our team, some who had endured intense sprints and overcoming seemingly insurmountable challenges. Some had endured intense sprints and overcame seemingly insurmountable challenges. There was an unexpected amount of fear and guilt about the impact our team, some who had been with us since the company’s founding, had endured intense sprints, achieved incredible success in the face insurmountable challenges and limited resources. As godfather to two of my teammate’s children, what can I do to honor their contribution and ensure they are treated well after the sale?
Selling also brought uncertainty about my own identity and purpose after closing this defining chapter. If I was no longer this company's leader, who was I? What would fill my days with the same sense of drive and dedication?
As emotional as it was, I had to embrace the change and navigate that roller coaster of uncertainty and complex emotions. Here are some tips for preparing emotionally:
• Focus on “why am I selling the business now?” Be clear about why you want to sell - retirement, burnout, new opportunities, etc. In other words, what is that anchor goal you aim to achieve? Is the goal to generate wealth for your family? Pursue another endeavor? Secure the company's future with new leadership? This clarity will inform the entire sale process.
• Clarify your Vision. What comes after the sale? Whether it's retirement, starting a new venture, or pursuing other interests, can provide a sense of purpose and direction to channel energy into.
• Keep Quiet. Don't disclose any intention to sell prematurely as it will hurt employee morale, invite opportunistic competitors to poach, and signal distress to prospective buyers.
• Support. With discernment, lean on you support system and solicit input from those who know you well, have your best interests in mind and have a vested interest in your success. For example; your spouse, a mentor, friends, family, business coach, peers, advisors, or even a therapist to discuss the complex emotions around the sale and maintain objectivity.
• Therapy. I was raised in the “walk it off” generation and therapy was not common. Fast forward to today and I’m an advocate for therapy. Everyone is different and outcomes vary but working with a therapist or does provide tools to process complex emotions and reframe perspective.
• Keep Your Eye on the Ball. Continue running the business as normal. A decline in performance will challenge the purchase price.
• Celebrate. While letting go is difficult, allow yourself to feel proud about successfully building and selling the business. Allow yourself to time to reflect and to celebrate what you’ve built and what you’ve contributed to your team and your community.
• The Best Defense is a Good Offense. Hire reputable third-parties to objectively value the business, manage due diligence, maintain objectivity, maximize value, and ensure a smooth deal process.
While immensely challenging, selling a business you've built can be navigated by being prepared emotionally and surrounding yourself with the right guidance. Having walked this path ourselves, we aim to be the trusted advisors for fellow entrepreneurs facing this significant personal and professional milestone.
We are investors and business owners, family offices, board members, and M&A experts, with an intimate understanding of what it takes to build a business and to exit successfully. Recognizing the absence of advisors who could effectively navigate the personal and professional dynamics of such a sale, PMC was established to offer fellow business owners a trusted advisor that navigate complex turnarounds and transactions and co-create a more prosperous future. Contact us if we can help.
In the meantime, following are additional posts included in this series: