The Third Key Element in Selling Your Business

Most small business owners I speak with about selling their business want to know two things up front: how much is their small business worth and how will their customers/clients and employees be cared for by the new owners? A subtle but important third key element is timing.

As in when will the change in ownership take place and how long will the owner need to stay involved?

Sometimes I’ll ask an owner, “Assuming you can get close to the price you want for your small business and you know your clients, customers and employees will be okay, when do you want to leave?” Some owners have a specific date in mind and blurt it out. Others hesitate and stumble.

What most owners don’t realize is that the timing of the sale of their small business is not only up to them. The buyer also has a say in this part of the equation.

I found in my own experience that once I made the decision to sell my small business, I was anxious to get on with it. This impatience is understandable and could have been a problem.

For example, in my impatience, I might have

• Undervalued my small business,

• Accepted poor terms,

• Limited the number of potential buyers,

• Locked myself into a longer term earn out than I wanted,

• Committed to staying on board longer than was good for me and the clients,

• Had incomplete due diligence about potential buyers,

• Weakened my negotiating position with buyers,

• Made inadequate transition plans for clients,

• Missed tax or financial implications.

In summary, as you think about your exit from your small business, be aware of two things:

1. You as the seller don’t get to solely choose when your business sells; the buyer has a say in it.

2. Don’t be too impatient. A litany of mistakes can happen if you’re in a hurry.

Impatience is a roadblock on the path to success. It can turn blessings into burdens and opportunity into regret.

Rather, as Joyce Meyer wrote, “Patience is not the ability to wait, but the ability to keep a good attitude while waiting.” And Saint Augustine wrote “Patience is the companion of wisdom.” Be a wise seller.