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Are You Prepared to Sell Your Business?

By Generational Equity

Prepared to Sell a Business

So, you have reached a point in your life where you realize it is time to move on from the business you have nurtured to success. You have also come to the painful realization that for a variety of reasons, the kids and your key employees are not going to be able to take over your business.

Finding a third party to acquire your business is the logical alternative to ensure you receive the financial ROI you deserve and that the legacy of your company will continue.

But are you really ready to exit?

We spend a great deal of time in these articles discussing how to create a “buyer ready” business. In many cases, that is the easiest part. You simply take steps to ensure that the risks associated with buying your company are reduced so that buyers are more comfortable investing. The less risk, the more they will pay and the better the deal structure when you exit (all things being equal).

The more difficult part of this scenario is preparing yourself to sell your business, and come to terms with the knowledge that you will no longer be responsible for the day-to-day running of your company.

How do you ensure that you are personally buyer ready?

More often than not, getting a deal across the goal line requires our dealmakers understand the psychology of their clients (and client’s families and key advisors) just as much as they know the business. A seasoned dealmaker once told me that his primary role was to act as a marriage and family counselor for the clients he worked for!

Having worked with entrepreneurs for decades now, we recognize from our vast experience that exiting a family-owned business can be one of the most difficult and emotional processes anyone can ever go through. In fact, many deals get to the 11th hour, in touching distance of the close, and the deal falls apart because the seller gets cold feet for a myriad of reasons.

Here are some reasons that we have heard:

  • “I’m just not ready to exit.”
  • “What will I do with the rest of my life?”
  • “I don’t like the personality of the buyer.”
  • “I will miss my employees.”
  • “I have no hobbies or interests outside of the business.”
  • “I am worried about the legacy I am leaving behind.”
  • “No one can run the business as well as I do.”

We’ve heard dozens of other reasons, all of which have nothing to do with the business or the deal structure itself, but everything to do with owners not being psychologically prepared to sell their businesses.

Understanding Business Owner Psychology

Recently Dr. Allie Taylor, the cofounder of advisory firm Orange Kiwi, was interviewed by Axial about her work with entrepreneurs to get them psychologically prepared to exit.

Dr. Taylor is a renowned expert in owner psychology, achieving a PhD in business psychology and devoting years of experience to researching the topic. This is how she described the challenge of working with business owners to prepare them for an exit event when she was asked: Do you get pushback from owners who are skeptical of your psychological approach?

A typical owner who is going to have a negative reaction is one whose identity is highly or very highly fused with his business and/or one who is not open to change. Even if they say they want to achieve a successful transition, below the surface they are experiencing a psychological threat. They will have to wait for a trigger event. In that case, we’ll be the ambulance at the bottom of the hill; we’re not going to chase them.

The Two Kinds of Business Owners

As we have said before, there are two kinds of business owners:

  • Those that PLAN to sell
  • Those that HAVE to sell

We often look at these two options through the lens of the business planning (getting the financials in order, etc.). I would suggest that the reason our deal teams have been so successful over the years is that they also look at these two options in the context of the psychology of the typical business owner.

So, ask yourself: Are you psychologically prepared to sell your company?

It is wise to address this question early in your exit journey, because the worst thing you can do is go through 90 days of due diligence with a buyer and then pull out of the deal because you are not personally prepared. We work closely with our clients to make sure that they are ready, and that the family and key employees are ready as well.

The great news is that quite often the owner feels a huge sense of relief after the deal closes, is financially liquid, and now has time to spend on enjoyment. Have a listen to a few of our clients:

To learn more about how we can help both you and your business become buyer ready, call us at 972-232-1121 or visit our website, provide us with your contact info, and we will be in touch. And if you want to read the entire informative Axial interview with Dr. Taylor, you can do so here:

By Carl Doerksen, Director of Corporate Development at Generational Equity.

© 2021 Generational Equity, LLC. All Rights Reserved.

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We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.
Karen S. Williams, CFO, BW Manufacturing
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Dear Chris and Andre, I just wanted to say thanks for all your help. Even though this process was not an easy one, it was comforting to know that I had a capable team standing beside me. You made me feel like we were almost your only client or at least the most important one. Thanks again, and I will recommend your service in the future.
Shenille Engelhart, Owner – CLS Technology
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”
Karen S. Williams, CFO, BW Manufacturing
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.
Bryan D. Horn, Owner, Over Under Clothing
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!
Eric Erlandson, Owner, Action Fastenings, Inc.
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
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Andy Graham, Vice President, Modern Heating & Plumbing
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.
Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.
Michael J Polarek, President, Paragon Packaging
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.
Michael J Polarek, President, Paragon Packaging