How to Sell Your Business – Emotions
Selling your business is emotional. Now you might be thinking that is a strange sentence to start off a blog posting about “How to Sell Your Business” but it is one of, if not, the biggest factor that an entrepreneur needs to remember when selling their business. Emotions affect all facets of your decision making – how you judge the pros and cons of a decision, your perception of risk and the likelihood of an event happening and the speed at which you make decisions.
During a sales process, entrepreneurs who by their nature are leaders, decision makers, risk takers and capital allocators are faced with the challenging decision of relinquishing this tightly held control over their business to a third-party buyer that they have likely spent less than a couple of days with over the course of the negotiations. That uncertainty needs to be weighed against the opportunity to provide financial stability to one’s family after years of risk culminates in a transaction that is often life altering in many forms. Newfound financial freedom, no longer being “the boss”, and expectations of your new business partners are only a few of the many changes that happen. Emotions are raw and real and understanding the role it plays is critical to a successful outcome.
We raise this topic of emotions now (and it will be a recurring theme throughout our posts) just to emphasis how important it is for entrepreneurs to have someone to lean on to provide another perspective. While a cynic would say that we are talking up our own book, and to an extent that is true, but we have seen time and time again deals come close to (or that do) get derailed by emotion. Entrepreneurs are used to making the calls on their business, often solely. In contrast, we have found that the most successful entrepreneurs rely on a close nit network of advisors, either formal (e.g. accountants, lawyers) or informal (e.g. hockey or golf buddies who are often other successful business friends) that they lean on for advise when making important decisions. You lean on them because they have some level of expertise, they are arm’s length and most importantly can provide a very important “gut check” when emotions are running high. An experienced M&A advisor will tell you what you need to hear, not what you want to hear when emotions are running hot through a process.
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