Entrepreneurs put their heart and soul into their brands. They spend countless hours agonizing over growth and success. The business cycle goes as planned and they've reached their goal. They're ready to sell.
The reality of this phase in the business cycle is the ugly truths about selling your business - your brand. It is a natural part of the entrepreneurship lifecycle. It represents a form of success, that selling your business was a choice, a milestone, a victory. What are the ugly truths and how do you cope?
It might not sell for what you think it's worth
Most businesses don't sell for their original goal. They may sell well, you may make a good deal, but the harsh reality in most cases is that the selling price does not begin to cover the entrepreneurial cost, let alone the emotional cost, of day in and day out tasks making your business grow. Entrepreneurs wear many hats and make many sacrifices to foster their brand's growth and ensure its survival. It can be hard to put a number on that when businesses are measured by clients, income statements and balance sheets.
Did the check clear the bank?
If it did, it's not yours anymore. Now it's time to let go and accept that it is no longer your brand to protect and grow. Someone else has the power to destroy what you've built. Take the example of selling your car. It is a beautiful white Chevy that you have kept in mint condition. Regular oil changes, proper tire rotation and plenty of car washes. You have your eye on a newer model, so you sell the white Chevy. A year later you see your white Chevy, only it's not white. It's green, and that green is not a new paint color. But, did the check clear the bank? Then it is not your white Chevy anymore.
Leave on your own terms
Transition time is crucial. When it comes down to it, there is no cookie cutter solution to a transition. It is, however, absolutely critical that the transition is a short one. Often times when selling your business you are asked to stay on to act as a proxy. There will be changes; changes in leadership, changes in opinions, changes in direction...and it is possible you won't agree with any of them. My suggestion? Sign up for a long-term (one year) commitment with an out clause, or simply stay on month to month until you feel the business is on its feet. Make sure your are free to leave on your own terms.
Your brand can be destroyed or improved
If you have successfully reached the point where you are selling your business, there is a good chance you were doing something right. There is also a good chance someone else noticed and they are buying it because they think they can improve it. Perhaps they think they know something you don't, an untapped market, a more efficient process,etc. Everything you have done (successfully or not) will be questioned. Did you miss any opportunities, did you fall behind, are you marketing effectively, do you have the right vendors, are the employees the right fit? Brands that have been in businesses for the long haul, while providing stability at the same time can stifle growth. Perhaps your buyers think they can increase the market share or margin that you couldn't. Be emotionally ready to accept that you did your best with what you had.
When you do decide to sell your business, recognize it as a success, but don't do it alone. CFO Team can walk you through the process with the experience and leadership needed for a smooth transition. Contact us for details.