Some people are born to be entrepreneurs and own companies, others just get lucky. I am one of the lucky ones and remain forever grateful to Dodd Clasen – the founder of Creatis – who took a chance on this corporate-gal-turned-wannabe-entrepreneur and allowed me to join Creatis as a minority owner in 2014. Creatis was Dodd’s baby – I just had the joy of raising her during her teen years until we sold her in early 2021. Which makes it sound like we sold off a child which, of course, really isn’t appropriate (or legal for that matter) but you get the idea.
I certainly am no expert on selling a business, but I do have some battle scars that I thought might be helpful to share. Don’t get me wrong, we were not at war with our strategic buyers who, in fact, are actually quite nice (which is why I am still working with them). But the selling process can leave some bruises if you don’t proactively manage it and go in with your eyes wide open.
Here is some advice based on my experience:
- Smarten Yourself Up. IOI. LOI. TTM. CIM. MRR. OMG – there are more acronyms than can SASA (that’s shake a stick at) and it’s a PITA (you figure that one out). Get yourself educated – because the more you know about the process the better your outcome. Read books and listen to podcasts (I highly recommend Built to Sell). Talk to people who have sold a business. Tap into your Allied Executive community. Ask questions.
- Don’t Get Scorched by The Hell Called Due Diligence. If you are selling your business - congratulations! You now have TWO full-time jobs – continuing to run your business AND gathering all the data the buyers will want to see. Do some ‘pre-diligence’ and start today – get your house in order and clean up your digital files. Get a list from a broker or someone like me about what kinds of things will be requested. Then get it organized or create the stuff you don’t have written down. During the sales process – be crystal clear about what exact input the buyer is seeking so you only gather the data and do the report once. Trust me, it’s the iterations that will absolutely kill you. Creating version #10 of the same report really sucks the joy out of the process (and will suck the life out of you).
- Be Kind to Your 2IC. Keep in mind this process is particularly painful for your second-in-command or those helping you run the business. Say thank you to them (often) as they are also pulling double duty and working hard to keep the business profitable. If possible, lock them in with some form of equity prior to your sales event. Having even a small ownership stake can provide an even bigger incentive for them to stay engaged both during and after the sale.
- Not Everyone Has to Know Everything Everywhere All at Once. I am sure you pride yourself on your transparency and having a culture built on honesty and collaborative. Good for you. But – be strategic about who you tell what and when regarding the potential sale. It can be disturbing and distracting. It can create uncertainty and stress for your team. Where do I fit in after the sale? Will I even be here after the sale? And some may even resent that you are getting this HUGE pot of money when they have been doing all the work (not appreciating the first 10-15 years when you grew the business taking no salary while living on ramen noodles). Bring people in as you need them. Otherwise, you create a whole lot of angst for a sale that may or may not even materialize.
- It’s an Emotional Process – So Quit Being Rational. One final note for even the most rational of you. This is an emotional process for everyone, especially for owners. If you haven’t defined what your next chapter will be there can be a great sense of loss and confusion of identity. If I don’t own my business than who and what am I? And be ready to walk away from the deal if you need to, by defining up front when you are clearer headed what that walking point will be. And if during the selling process you ever hear yourself say, “I just don’t care anymore – let’s just get the deal done” – it’s probably a good time to hit the pause button and rethink your approach.
They say that life is a journey, not a destination. And that IS a lovely thought, except when you are selling your business. Then, it’s ALL about the destination of getting the maximum value for the business you’ve worked so hard for. And the journey of selling your business can be almost fun – almost - if you plan for the unexpected turbulence and strap that seat belt on nice and tight.