It’s easy to get lost in your thoughts and imagine life AFTER you sell your business. Perhaps your version of paradise includes holding an umbrella laden fruity drink by the resort pool or fishing until sundown because you can. Maybe it’s golf whenever you feel like it? But, are you ready to sell your business?
It sure sounds better than ringing phones and dealing with the crisis of the day right? Expert business broker Bianca Evans chuckles when she hears business owners talk about the “other side.” “Your post-sale life can take whatever form that makes you happy. It’s all doable, but pump the brakes and let’s think this through”, she advises. “I’ve seen too many business owners get caught up in the glamour and then have sellers remorse. Sometimes it even happens before the deal is done.”
Before you book those plane tickets to Tahiti, pause for a moment, and make sure you don’t fall prey to these common pitfalls.
Failing to have a “life after” business plan
Step 1 is to have a good conversation with your significant other. Do they understand your motivations and share the same goals? Avoid exiting your business without having something that will replace your income (if needed) and stimulate you mentally. Even endless golf rounds and fishing to excess can get boring. Entrepreneurs are high-drive type of people that need problems to solve and challenges to overcome. They want to make a difference. Serial entrepreneurs don’t make very good couch potatoes. Ask yourself, what’s next? And have a plan.
Not talking to your financial advisor
Remember that your financial advisor is your partner in your success. You can’t hold back information from them and expect them to be successful on your behalf. Major life changes like divorce, buying a house, sending kids to college, and selling your business take pre-planning and execution.
Your financial advisor can help you understand how comfortable your retirement is going to be with your current nest egg. Also, once you sell your business, your risk tolerance might change. That large sum of money earned after the sale needs to have a strategy behind it to get you closer to your goals.
You lost the passion
Gone are the days when you leap out of bed and can’t wait to get to work. The excitement is gone and successes don’t bring the same adrenaline rush it used to. Evans has some good advice. “It happens to everyone. I haven’t met a business owner yet that doesn’t describe their business in this way at times. Hopefully, it’s just a temporary feeling, but if its not, its time to take a deeper look at the causes. I recommend taking note of all the things you love doing for your business. Then, more importantly, note the dreaded tasks that sap your energy and find a way to take those off your plate – even if it costs your money. Your mental health is worth it.
If that doesn’t work, maybe it really is time to sell your business and move on.”
Beware of shiny objects
Some entrepreneurs love the startup phase of a business because this is when excitement and anticipation is at an all time high. Baseless optimistic projections get them giddy and they lose focus on the proven and reliable income stream of the current business. Leaving a successful business to chase another can be tricky Evans warns. “The reality is, most small businesses fail, so you already beat the odds. Be careful chasing shiny objects! If you have a successful track record, you very well may be successful again, but its not guaranteed.” Alternately, you may want to consider buying a different, existing business if the goal is to try something new.
Putting yourself in a position to sell a business is a remarkable achievement that only a minute percentage of people reach. For most, the business sale will be the largest transaction you will make in your lifetime. Pause and let that sink in for a moment.
Evans summarizes “Before you go through the exercise of crunching numbers and signing papers, think about life away from your business. Reflect on your life goals, seek spiritual guidance if you feel that’s needed and talk to your loved ones. After all, they are affected by your decisions as well. As much as you may tell yourself this is a business decision, it’s really a life decision.”