Deciding to sell a business is no small beans. It’s a decision a business owner labors over for months or even years before finally pursuing. Whether the owner built the company from the ground up or purchased it from another owner and grew and nurtured it over the years, there are a whole gamut of emotions that come into play. After all, you don’t pour blood, sweat and tears into something and persist through perilous times without becoming emotionally attached to that which you fought so hard for, right? These emotions come into play both in the motivation behind the sale of a business as well as throughout the process. It’s vitally important to anticipate varying emotions while at the same time remaining objective and focused to ensure the best outcome.
Psychology behind the sale
Whether an owner recognizes it or not, there are three primary factors that drive the sale of a business: timing, health and divorce.
Timing: You’ve heard the saying, “Quit while you’re ahead.” Well, that’s precisely what many owners do. Afraid they can’t surpass their best year ever, they decide to sell and end strong.
Health: As a human on this planet, each one of us is vulnerable to personal tragedy. Whether it’s the sickness or death of a spouse, family member, friend or co-worker, there are numerous earth-shattering moments that bring close the reality that life is indeed short. It’s often out of this awakening that business owners decide to sell and pursue other dreams or endeavors.
Divorce: Whether it’s motivated by the determination of a divorce decree or from a desire to start fresh, divorce is a major factor in the decision to sell a business.
Psychology throughout the sale process
According to a 2013 article in the Scientific American, titled “Negative Emotions are Key to Well-Being,” the author, Tori Rodriguez, states that:
In fact, anger and sadness are an important part of life, and new research shows that experiencing and accepting such emotions are vital to our mental health. Attempting to suppress thoughts can backfire and even diminish our sense of contentment. “Acknowledging the complexity of life may be an especially fruitful path to psychological well-being,” says psychologist Jonathan M. Adler of the Franklin W. Olin College of Engineering.
Allowing yourself to feel your emotions and to ride the waves they come in on is an important key to mental health and contentment and will serve you well long after your business has changed hands. Be it sadness, anger or a sense of loss, remind yourself that these feelings are all a part of saying goodbye to something you truly cared about. The challenge is maintaining objectivity in your decision-making in the midst of these feelings. Various professionals (accountants, attorneys, brokers) that assist you throughout this process will help you stay focused.
Having an exit strategy in place prior to the sale of your business will also help you to remain objective and keep your emotions in check. Will you stay on as a consultant and help the next owner through his or her transition or will you make a clean break and pursue another business endeavor altogether? Although a business sale can seem lengthy and all-consuming, nothing breeds anxiety like waking up one day and realizing you don’t have a plan. Spend some time discussing your post-sale plan with your spouse, a trusted friend or a professional you respect. Then move forward confidently into the next chapter of your big and beautiful life.
If you are thinking about buying or selling a business, we would be happy to connect with you. We can be reached at 612.331.8392 or by email at firstname.lastname@example.org.