You’ve heard the phrase, “It’s not personal, it’s business.” However, when it comes time to transition or sell your business — either to an outside buyer or to a family member — emotions often come into play, whether or not the seller has put extensive planning into the passing of the business ownership baton.
I’ve had clients work diligently with our team of experts to plan every step of the sale of their business, but when asked how they’re feeling, they often reveal the emotions they’ve kept bottled up inside. These emotions may be for a variety of reasons, but the end result is the business will no longer be operating under the owner’s influence. And that is a very personal issue.
It’s in scenarios when no planning has occurred that emotions have the most potential to result in bad decisions. Situations where emotions can take control include:
- Wanting to transition the business to a child, but the son or daughter doesn’t have the interest or skills needed to take over the helm
- Selling the business to a competitor
- Having to sell the business for financial reasons
- Selling the business because it seems like you “should,” even when you’re not ready to give up control of the company
- Dealing with pressures of life as you prepare to sell the business, such as caring for aging parents or struggling with a health issue
Business owners need to carefully plan for a business transition, but they also need to keep in mind their emotions and how they’re reacting to the change, including after the business has been sold. In my experience, it is as vital to prepare for life after the business, as it is to prepare and sell the business itself.
One might ask: “How could I not be happy now that all my financial worries are gone?”
The answer is different for everyone, but I’ve had many clients dealing with issues of no longer feeling needed or in control, not receiving the level of respect at home that they did in the office, or simply that their busy days have become a vacuum that reminds them they are no longer making critical decisions daily, growing a business or building things. These feelings create a variety of emotions that can affect a person’s overall wellbeing.
There are as many remedies as there are people, but you might consider these areas as you embark on the journey of exiting your business:
- Planning: Have I planned sufficiently with my advisers and wealth management team to feel at ease with my financial future and legacy?
- Time: How will I meaningfully spend my time, and ensure a good balance of relaxation and purpose?
- Impact: What type of impact do I want to make with my family, in the community and with my time and resources?
As one might imagine, there are no right or wrong answers, and it will be driven by each individual and their personal motivation and aspirations. My advice, however, is to be intentional and not sell yourself short.
By not preparing properly to sell your business, you may leave money on the table. But by not, in turn, emotionally preparing yourself to sell your business, you might find yourself feeling lost.
There’s an old saying that applies to this situation: “I want to make my mark in life, while there is still ink in my pen.” Being deliberate when planning your business sale on both a professional and personal level may set you up to not only reap the financial rewards of having built something meaningful over time, but also allow you to look forward to it with the richness it deserves.