Five Hidden Challenges in Selling Your Business (and How to Conquer Them)

If I asked you to list the challenges in selling your small-midsize business (after you’ve decided to sell it), what would you say? Go ahead and make a list. I’ll wait.

I’m willing to wager five of the challenges you did not list are:

1. Telling your team

2. Telling your customers and clients

3. Running the business as you get ready to sell it

4. How to survive the emotional ups and downs

5. Deciding what you will do next

Let’s explore these a bit.

Telling your team you’re selling the business is like telling your kids you’re selling the family house and are moving away. Immediately upon learning your intentions, your team will ask themselves “What does this mean for me?” You had better be ready with a satisfactory answer or they will start to mentally and emotionally check-out and then you’re in deep trouble. Your key people may even leave during your transition. You need your team to keep operating well or the business will lose effectiveness. Plus, your team talks to clients and vendors and others related to your business. The message you give your team needs to be carefully thought out and individualized to avoid as much turmoil and downsides as possible.

Telling your customers and clients you’re leaving them is also tough because they’ll ask themselves the same question your team ask, “What does this mean to me?” And again, you had better be ready with a satisfactory answer or the clients will vote with their feet. If your buyout includes on-going payments based on expected client revenue (typically an earnout or note with review or a combination of these), your future finances are in peril. Make sure you’ve got an answer for each client and be prepared to meet with each client individually to communicate with them (tell them your story and listen to their comments). Give yourself enough time for this critical step.

Running the business as you get ready to sell it is not easy because suddenly you have two goals – service clients and figure out how to sell it. Serving two opposing goals was one of the harder tasks for me to navigate when I sold my small business advisor business. My single focus before I got close to selling was suddenly divided. No longer focused on client service and growth, I lost my way, and many days didn’t know what to do. Conflicting priorities drove me crazy. Get comfortable with this temporary dual focus and manage both.

Figuring out how to navigate the emotional ups and downs of selling a business you created, nurtured, and grew is essential for your successful exit. It’s a personal journey when a business owner sells his/her business. You can expect to go through many iterations of fear, frustration, elation, sadness, doubt, happiness, sorrow, and grief. My best advice is to be prepared for the emotional ride, acknowledge it, and enlist a support crew who will be with you for this part of the journey.

The last hidden challenge is being prepared for what happens AFTER the sale. Even though I was a financial advisor for over 20 years, I was my worst client in this area when I sold my business. I wandered in the desert of indecision after my business sold. My daily and weekly rhythm was thrown off. My usual contacts were gone. I was a mess.

To help you navigate the transition period, I suggest you create a simple retirement plan for yourself focusing on the small business and non-small business aspects. Perhaps create a two-year plan to guide you through the first months after you exit. You can make a longer plan after the first two years have elapsed and you have less noise surrounding you.

In summary, if you’re ready to sell your business, ready to move on to something else, be prepared for the obvious and not so obvious challenges.

Selling your business is not simple or easy, but it can be managed. We tell clients the essentials are:

1. Have a plan

2. Maximize revenue

3. Get your documents in order

4. Have a realistic sale price in mind

5. Be flexible

 “Be Flexible” is key and will help you navigate the expected and un-expected challenges.

We’ve created a proprietary Exit Readiness Check-up system. We look at eight primary factors and a total of 100 key points to help you determine if your business AND YOU are ready to exit. The benefit of this system is you’ll know the strengths and weaknesses of your business. You can use this information to improve your business, prepare yourself and market the business to the right potential buyers.

Right now, we’re offering the Exit Readiness Check-up system at a preferred fee to a limited number of companies. If you’re interested in how this system can work for you, please reach out to us for a complimentary Get Acquainted phone call.