I was sitting one day recently, musing – as you do – on what a corporate transaction means to the owner of a SME. To most it means a relief from the ‘daily treadmill. To all it means a sudden influx of money. To all it means changes in how they spend their time and measure their priorities. In a very real sense, the business no longer – ever – comes first. It may remain important to an individual who has stayed on post-transaction. But it will never again be an all-consuming passion – or an all-consuming problem!
Selling your company NEVER makes you a different person, although it may well make a changed person.
Beyond that the effects are as varied as people are varied. Some will feel a great sense of relief. Some will feel ‘at a loose end’. Some will worry about the future of the business in new hands. Others will forget about that phase of their life very quickly. We all behave according to our established character traits in such cases. Selling your company NEVER makes you a different person, although it may well make a changed person.
Selling is not giving up, surrendering, or failing.
Selling is not retiring, although it may lead to retirement. Selling is not giving up, surrendering, or failing. Selling is not a doorway to a perfect life either! Selling can be a very emotional experience indeed, and usually is for family shareholders. For some it is even a form of bereavement. On the other hand, many corporate teams have been planning for a sale for years. To them, it is just another business process; and because they have made mental preparations already, the process is treated with minimal emotion.
Prepare yourself for sale, not just your business.
I then began to consider what advice I would wish to give myself, if in the shoes of a potential vendor of a company. My first recommendation would be “Prepare yourself for sale, not just your business.” My second would be “Prepare your loved ones too.” There is no point in selling if that sale does not lead to a better tomorrow. Trying to escape from a rotten today has never worked. It creates anxiety, ensures you fail to get the best price, leaves you suddenly empty after the transaction. So, it is very important indeed that you have a think NOW about what your personal ‘better tomorrow’ can look like. How do you want it to look, anyway? I had one client who saw the future as involving a yacht and a year trip around the world. Strangely enough that affected his family just as much as him running a business had affected them. That dream had to be pursued in conversation with those he loved. Otherwise, there would have been a very interesting journey – either alone for the duration, or alone at the end!
There is no point in selling if that sale does not lead to a better tomorrow.
Different deal structures do not just exist to deliver the purchase price. They also exist to give the seller opportunity and flexibility. Some may wish to continue their career in a larger organisation. Some may want to gradually, rather than suddenly, withdraw. Yes, this may well get you more money in the end. Yes, it is a good way at looking after the interests of valued staff members. But it is also a way of adjusting to a new ‘tomorrow’ – and ensuring that it really is better! In my next blog I will look at how to ensure you prepare for sale in ways that truly add value.
We would be very pleased to speak with you about your plans and how we can assist, please get in touch.