Take these 4 Steps EARLY to Emotionally Prepare
Sellers often don’t give much thought to whether they are emotionally ready to sell their businesses. Neglecting to consider the significant life changes that occur can result in depression, anxiety and a general lack of purpose post-sale.
Sellers are used to being in the top leadership position in the company, recognized as having most all the knowledge, answers, authority and respect. Rarely have owners focused on their own personal needs and wants separate from the business. In reality, the business is frequently seen as an extension of the owner’s identity.
Many sellers who have not adequately addressed the emotional aspects of leaving their business will inadvertently take steps that undermine their own progress. While they believe they want to move on to the next phase of their lives, there are underlying questions about what comes next and how they will be defined.
What can you do to help bridge the emotions between being the owner to being “just” a private citizen?
- Bake time into the process.
Several years should pass between the first thought and closing the sale, so patience and deliberate focus are required. Continuing to run your business at optimal levels is paramount.
2. Talk with your spouse, confidant or trusted advisers (actually, all three).
Talk with them about selling the business as well as your plans, ideas and fears to help envision your Life Beyond Business. These important individuals in your life will be good sounding boards and may help you recognize aspects of your personality you are disregarding. Before starting your business, you had a vision that gave you the energy and focus to achieve your goals. Going back to the basics works: Envision, plan, achieve!
3. What about money?
Once you have that vision of your future, can you afford it? It’s best to find out early how much you should expect from the sale of the business and how that will impact your lifestyle and goals. Learn what the business is really worth from an objective, comprehensive valuation. Imagine this: You realize a week before (or worse, after) the sale of your business that, after taxes and selling expenses, your invested money will not last as long as you need! Reference depression and anxiety above.
4. Finally, make sure you can really let your business go.
In the end, many business owners discover that deep down they are just not ready to move on. Are you sure you are ready for a new future? If not, take steps to become more confident in your decision. Start by developing interests outside your business – devote more time to a hobby, volunteer for a cause important to you, build a network of peers outside your role as business owner. (A positive side effect is that being away from your office a bit more will help the business become less owner-dependent – always a plus for business value!)
• What is important to you personally?
• What do you truly enjoy? (Besides your business, of course.)
• What have you always thought you might like to do if only you had more time?
Get a head start on exploring those interests and engaging the aspects of your personality that may not be obvious in your business life.
Beware of inertia that can prevent you from considering your future. Most sellers (the ones who were emotionally prepared) say “I wish I had sold sooner” while enjoying their newfound freedom and interests.
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