There are many articles available about preparing your business for a sale to help you achieve the best price. We have written some too: check out our blog for more information on that.
But what about preparing you? There are emotional implications to selling something that’s taken up a huge part of your life for a long time. We recently caught up with a previous client, Jason Wynne, from Professional Freight Solutions Ltd, whose business sold nine months ago. He spoke about the importance of preparing emotionally for not only the sale process but what comes after. Selling a business is a life-changing event, and one that can’t be taken lightly. If you are a hands-on business owner that spends a lot of time either working in or thinking about your business, then the loss of direction after a sale could be a difficult transition. Here are our takeaways from that conversation:
1. Start thinking about a sale well in advance of pushing the button. As much as this gives you time to get the business primed, it also gives you time to get used to the idea.
“Making the initial decision to sell the baby I’d nurtured for 14 years was a hard one.”
2. Don’t make the mistake of seeing the sale as your ultimate goal. What comes after will be just as important in the long run – what will you do post-sale? Think about what happens after – the earn-out, working with an acquirer, how long you want to be in the business, what you will do next. Make sure you have a quantifiable plan. Twiddling your thumbs the day after the sale, or the day after your earn-out ends, is not a good idea.
“No matter how much you prepare it will be difficult to let go of something you’ve put your heart and soul into.”
In Jason’s case, he started thinking about a sale after two extremely buoyant years. His business was in a great position, and he wanted to spend more time with his young family – it was time to make a change.
It is imperative that you take your time and make sure your thought processes are in order. Jason found starting his planning early useful: “it takes time. It is a difficult decision. It needs a lot of thought; you need to put yourself in a lot of scenarios. Start thinking about it as early as you can because it takes time to come to fruition and you need time to mull over all of the elements involved. Even when you get close to D-day, it is still a very, very difficult thing to do.”
Basically, think about what you want out of the deal and what you want your life to look like post-sale before you start the sale process.
Jason found the entire sale process fascinating, and admits that he learnt a lot throughout about the intricacies involved. His business attracted lots of interest, with 15 parties coming to meetings, and experiencing the negotiations required were a real eye-opener. During the meeting stage we advise our clients to think not only about the synergies between their company and the acquirer’s company, but also about personal synergies between them and the buyer. These meetings give our clients the opportunity to talk with the potential acquirers and evaluate whether they would be able to work with them post-sale. Finding a buyer that you can build a good relationship with, and one that you know will look after your business will help you find peace of mind post-sale.
Jason’s deal included a two-year earn-out, and at almost a year in, he is finding it a great way to transition out of being a ‘business owner’. His working life now has proved better than envisioned – his relationship with the acquirer is strong, and he is helping to drive further growth in the company that he has nurtured for 14 years.
He is still the MD for now, but works part-time, and is finding the gradual step back a useful transition period. He is still thinking about what he will want to do at the end of his two years, but is considering staying on one day a week.
As he says, this will give him the best of both worlds: more precious time with his family, but still able to continue to drive the success of the business he founded.
Watch our video interview with Jason, where he talks about his experience of the sale process here.
If you are thinking of selling your business and would like to explore your options with Kingsbrook, please get in touch, either by email at [email protected] or call us at 01635 736741.