We come across two basic types of sellers in our business. The first type are burned out and totally ready to move on. These sellers are very motivated and typically have one foot already out the door.
The second type of seller is someone who is considering selling, but the decision has been excruciatingly difficult and the bond with their business, their clients and their entrepreneurial life is strong.
If you are a business seller who falls into this second category, you not only need to prepare your business to sell – you need to prepare yourself.
Buyers can sometimes be insulting, and you don’t want this part of the business transaction process to keep you from a closing table. What do we mean by insulting buyers? We’re not talking about personal insults here, we’re talking about perceived insults to you business. Buyers come to the market looking for flaws, and they will use these flaws (perceived or not) to try and negotiate the best possible price they can get. A seller needs to have thick skin when the negotiating starts because your business will probably get picked apart and the value you put on the business will be whittled down. None of this is a personal attack on you. It is simply the nature of business transactions.
How do you deal with this? Know that it’s coming and realize that you would do the same things if you were in the buyer’s shoes. Negotiations happen so both sides can get the best deal possible, so leave your personal feelings aside if you want to be successful.
Another major hurdle for some buyers is the relationship they have with their clients. If you’ve known these people for many years you might feel like you should be honest with them about your intentions to sell. DON’T. Confidentiality during a business transaction is what keeps your business viable all the way to the closing table (read more about what can happen here). Telling you clients or even a loyal staff member will let the cat out of the bag and irreparably damage your business during a very important time – when you are trying to sell.
How do you keep the cat IN the bag? Don’t tell anyone about your potential sale until the deal is done. Realize that your clients aren’t yours, they belong to the business and by selling that business you are transferring those clients (and staff) on to the next owner.
Selling your business is an intense experience, so while you are collecting your financial documentation and getting the carpets cleaned for any potential buyer walk-thru – take some time to mentally prepare yourself for this big change in your life. If you are having trouble letting go – focus on what your life will be like after the sale, on what you’ll do with the proceeds from your sale and on your next big adventure.
Are you thinking about selling but are very concerned about what will happen to your clients or staff once you are gone? Do you want to know more about what you can do to prepare? Leave any questions or comments here and we would be happy to help.
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907