Selling your business is a life altering transition that should follow a carefully managed process to minimize stressors and maximize benefit. It sometimes requires an extraordinary shift in perception. We have worked with hundreds of entrepreneurs through a business sale and transition into retirement or a new business venture. For most, after years of grinding it out, plowing the field, and praying for rain, it may be time for a shift out of the daily operational routine.
What is Seller’s Remorse and Why Does It Happen?
Selling Without Professional Representation
Running a business is a full-time job; so is managing a transaction through the sale process. Business owners sometimes double their workload, and associated stressors, when entering a transaction without professional representation. In addition, there is an array of variables and impasses that professional business intermediaries like the SMP team can mitigate before they become problematic, saving you time, money, and business value. Not every business intermediary is created equally. You will want to interview several broker outfits to gauge their experience, industry expertise, and understanding of deal nuance. These are critical earmarks of talented M&A professionals and you will want the most experienced and accountable team to represent such an important process for you and your family.
Selling to an Undercapitalized Buyer
Buyer intake is a dedicated process that requires time and nuance. Our team at SMP Capital spends hours interviewing and qualifying potential buyer candidates for your business. They sign a detailed NDA, provide financial credentials, interview with our team to determine “fit” potential, and learn what to expect from a transaction process. Rest assured that when we introduce potential candidates, they have been properly vetted. We do not waste your time with time wasters who kick the tires of hundreds of businesses and never buy anything.
Selling at the Wrong Time
We study market trends and live in the transactional world so we will provide guidance if any given time is not the best time to go to market. Our interests are aligned with yours. We want to maximize your transaction potential and will help determine the best time to go to market even if it is a few years away.
Improper Transitioning
It does not happen often, but occasionally sellers will detach from the business too soon after the transaction. Selling a business brings a lot of change but with your help, the day-to-day operation can remain status quo for your team, suppliers, vendors, and customers. It is vital to plan with your advisory team along with the buyer to minimize unnecessary disruptions.
How to Prepare for Life After the Sale
- Identity: For years, you have introduced yourself to strangers by what you do. If you have closely identified with your business, it may be a tricky separation. People are complex and are more than their work. It may be helpful to start thinking now about what you will do and who you will be.
- Foresight: Plan now for what you want to do. Trips around the globe? Plan now. Identify upcoming events, people, holidays, seasons, and work you are excited about and will greet with anticipation and spirit. Whatever it is that you have always wanted to do, take the initiative and aggressively start planning now.
- Ambitions: Most business owners have business projections for the coming year. Now we transition into personal projections. It is the same process as always, only more personal. What do you want to accomplish? Do you want to set workout goals, travel goals, reading goals, investment goals, new skill, etc.?
Tips for Ensuring You’re Emotionally Ready to Sell
- Start planning now so that when the moment is right, you are ready, the business is ready, and you have put yourself in the best position to maximize the sale price and your total seller benefit.
- A lack of preparation will create stress that compound the rigor of the transaction process. Be ready and eliminate unnecessary stressors which limit emotional highs and lows.
How to Ensure a Fair Sale Price
This is where highly qualified advisors come in handy. The SMP team will outline your current range of value based on careful analysis of your company’s historical and year-to-date financial data, current and thoroughly researched comparable industry sales, and commonly held industry standard metrics that influence business value, specifically infrastructure and org chart strength, customer concentration, owner role, and growth potential.
Once we have established an acceptable range of value and discussed potential deal structures, our team works to create a controlled environment where multiple buyer targets simultaneously compete for the same opportunity.
Post-Sale Strategies for Financial and Personal Success
- Consult: Your life and business experience have value to those who do not have it. It is quite possible you will be asked to stay on board post transition as a consultant to help the new team adjust. We always encourage business owners to be flexible and open to any possibility post-closing.
- Labor: Keep moving. Humans are not built to sit around all day. If you felt like your business kept you from physical exercise, now is the time to make up for it. You do not need a gym membership or a personal trainer to start. Open the garage door and take a walk down the street for an hour. Whatever you do, do it with vigor.
- Foundation: Family structure, civic organizations, volunteering, friends outside of your old business, etc. The foundation of happiness and overall health is built on the relationships you cultivate. Building and maintaining a community of friends will give you a higher percentage change of healthy, long-term longevity.
How SMP Capital Partners Supports You Through Every Step of the Process
We believe every business owner should know what their businesses are worth. We will initially provide a complementary valuation which will outline your current range of value based on a careful analysis of your financial data, recent and thoroughly researched comparable sales, and commonly held industry standard metrics including infrastructure, customer concentration, owner role, growth potential, and company strengths.
We then work to create a controlled environment where we engage multiple and targeted buyer prospects simultaneously while offering some of our listings via “Market Value” pricing. We do not haul and hope with one buyer. We want to bring a carefully curated list qualified buyer prospects to the conversation early. We never stop negotiating on your behalf.
From the initial buyer prospect conversations, to LOI analysis, due diligence coordination, legal documentation, and finally to close, we never stop working to generate the most positive result possible for you and your shareholders. We can get your business closed. We can get you off to your next adventure or business opportunity. We are true grinders, just like you are. We have done this before and we hope to be of service to you.
Transitioning out of business ownership is really hard. We would be lying to you if we said it is an easy process. That is one of a myriad of reasons why it is a good idea to speak with teams like us at SMP Capital Partners early and often. We specialize in empathy and will always give 100% of our effort to representing your hard work, effort, and best interests before, throughout, and long after the transaction is closed. We would be happy to help start the conversation.