Avoid These Deal Killers by Understanding How Aging Entrepreneurs Think
It’s an unfortunate truth: Some potentially promising acquisitions fall apart before the deal is finalized. Sometimes, the owner flatly rejects a solid offer before negotiations even begin. Or the owner gets cold feet in the middle of the process. These deal killers can be avoided when you have an understanding of what’s going on inside the mind of these business owners.
Owners have some perfectly legitimate reasons not to sell their businesses. For example, some believe they still have enough gas in the tank to keep growing it. Others are grooming family members to take over.
But all too often, problems arise when owners hesitate to sell for one of these three reasons.
Reason No. 1: Procrastination.
Business owners generally procrastinate because they assume they can always sell later. They underestimate how difficult it can be to sell a business. Some owners procrastinate because they don’t know how to create an exit strategy.
Reality strikes when they reach retirement age and discover how much energy and time it takes to actually sell a business. Even worse, the economy crashes and panicked owners feel forced to sell their business before they feel ready.
At the LaManna Consulting Group, we coach business owners to start preparing for the sale of their business long before they actually sell it.
Reason No. 2: Fear of the future of their business.
Many business owners struggle to picture themselves without their business, and vice versa. This leads them to worry about every little thing that could go wrong if they announce they are trying to sell. Here are some common fears:
- They will no longer be relevant
- Their business will not be worth enough to satisfy their retirement needs
- They will lose control and assume no one can run the business than they can
I advise owners to relax. I remind them they won’t be the first person to sell their business, and certainly won’t be the last.
We encourage business owners to hire a team of experts to help them with the sale, so they can remain focused on running their business until a deal is cut. One reason businesses fall apart is because the owner completely loses control over it during the selling process.
Reason No. 3: Fear of the unknown.
Many business owners feel lost when contemplating what they will do after selling and leaving their business. They have a hard time seeing themselves as anything other than a business owner.
They freak out when they picture retirement. How could anything possibly give their days as much purpose as the business does? Somehow, it feels like days of relaxation and golf just aren’t going to cut it.
LaManna Consulting Group advisors help business owners conquer some of these common emotions before the selling process begins. We emphasize that holding onto a business for the wrong reasons can be detrimental both to their company and their personal life.
We urge business owners to spend more time with family and friends or explore some of the millions of other ways they can bring meaning to their lives. We remind them that retirement gives them the freedom to travel, write a book, pick up a new hobby, or dive into other pursuits.
We believe it’s critically important for owners to think about their exit strategies and feel emotionally ready to sell.
The best way to avoid deal killers is to remove potential stumbling blocks before an acquisition offer is made. Call us and we can introduce you to business owners who have already started thinking seriously about their lives after their business is sold.