Selling a Company: Myth – It’s All About the Money

Selling a company brings up important questions. What outcome from the sale of your company do you desire? How is the sales process impacted by that? And how are you going to figure out the process? To think it’s just about the money is a myth.

Your goals are broader than financial ones, and go farther than just you, once you haven given time to thinking about them. What are the goals for all parties: you, your family, your business, your employees, and other stakeholders? As we’ve often said to our clients and colleagues, your business is more than a paycheck; it is a fountain of pride, purpose and relationships. It hasn’t been just about the money when you worked in it, and it won’t be when you sell a company.

A significant change on multiple levels is necessary to successfully sell a company. Transitioning away from the business is a journey from the well-known to the unknown, and it should be regarded with more than just a momentary thought. What is your destination? What do you hope to accomplish by selling? Who needs to be part of this planning process? It is critical to your sale having a successful result as you define success that you understand your business, financial, and personal goals.

Typically, however, business owners describe their objectives only financially — getting the highest price with the lowest taxes at closing, or perhaps establishing a future income stream. Making a dollar goal is somewhat easy, with all due respect of the art and science of business valuation. Another goal may be to sell a part of your business or the business as a whole. Or it could be to retain power and finance growth through recapitalization.

You do need to think deeply when assessing your financial needs, risk tolerance, and many related issues. What are the needs of family members and other stakeholders? Are they committed to the idea of the business being sold? Is it imperative that you cash out at closing, or would you think about keeping a small investment in the newly sold company? And what is realistic? All people have financial dreams, and whether the market supports yours will be realized over time.

Oftentimes, business owners have told us that their goals are more than just money. Money is important to them, but it is not the only thing. Just as their business means more than money to them, so does its sale. They want it done right, but struggle to explain what that significance is and what their aspirations are.

Clients we’ve worked with often preliminarily define the sale of their business in terms of money because they haven’t taken the opportunity to think more broadly or don’t know how. We then work with them to consider the big picture: the best-case picture of their future — meaningful engagement with the world through work, family, activities, charities, adventures, spiritual and community commitment — after the sale.

Selling is, after all, a chance to redefine your life. It is more than just the money. What will the new you do? Who will the new you be? We’ll outline probing questions in future articles to guide you through this process of self-discovery.

Answers to these questions will affect the type of buyer and transaction you target, and become the basis for your selling strategy. A good place to start is by knowing your definition of success - in terms broader than money – that works for you.

I invite you to use these ideas to create your best-life business exit strategy.