Selling a business you’ve invested so much in is a major life change. It’s very easy for business owners to underestimate the emotions of selling life’s work and what a post-exit life looks like. Financial security doesn’t necessarily mean emotional fulfillment. Some sellers experience regret, others have a sense of loss, and some are surprised by how deeply tied their identity and self-worth is to their business. When considering an exit, preparing for the emotional side may be more important than the financial side.
We will caution you during this process to be aware of the potential emotional rollercoaster and share what we experienced in selling our businesses. The best advice we can offer is to be prepared for a range of emotions and give yourself permission to feel them, all of them! It’s likely you’ve invested decades in building, growing and leading your business. In some cases, you are the job; your business is part of your identity, your purpose and your routine. It’s our hope that by working backwards, we may share some insights you find value in. Selling your business is very similar to riding the waves in the ocean.
“The ocean can’t be controlled or bent to your will. Sometimes it’ll make your life hard, and other times it will feel like a cakewalk. Be grateful for your blessed life and have fun in both circumstances. Ride the wave!”
When selling your business, it’s natural to think of other major life changes to make – homes, boats and other toys, once-in-a-lifetime-vacations and other extravagances. Selling and exiting entirely or entering a TSA (transition service agreement) is enough change to manage at once. We’ve seen owners make a handful of changes immediately after completing their sale to their detriment. Avoid making too many changes too soon after selling your life’s work. We recommend taking a six-month pause for any other major life changes to minimize any remorse, anxiety or shots to your identity. It’s understandable to reward yourself, you and your family have earned it, but keep in mind the bigger picture. The sooner you resolve this, the better off you’ll be :
What is the purpose of this newfound money in your life?
After years of intense focus on building and nurturing your business, it can be an unusual feeling to have the freedom of time (in a full exit) or you’re now being an employee (in a rollover equity or earnout situation). I worked with an executive coach leading up to my first exit and continued with him during the first twelve months post-exit. Keeping me grounded, challenging my purpose and holding space for me to explore what next may look like was invaluable for me. Find space in the margins. It took me two years to get settled into this new life’ and we’ve seen some entrepreneurs take as much as five to seven years ‘to get there.’ The margin is those in-between years where you may find the greatest growth period of your life. Ask yourself:
Will selling your business guarantee you happiness?
What are you curious about?
What are you grateful for?
The Hidden Emotions in Selling a Business
Most entrepreneurs are laser focused on the money in selling their business and what that windfall will do for them and their family. Throughout the process, we do our best to navigate you through the emotions of each stage – negotiating the deal, maximizing valuation, and securing the best terms – to minimize any emotional gap a client may not expect.
Selling your business can feel like losing a piece of yourself. The daily problem-solving, the decision making, leading your people isn’t there post-exit. The fear of ‘what’s next’ is real and we want you to embrace it! Here’s why: The chemical reaction going on in your brain when you’re excited is identical to the reaction in your brain when you’re afraid; fight, flight, fawn or freeze. We’re here to help you redirect those anxious thoughts to being excited for new beginnings.
How to Prepare Emotionally
Selling is the start of a new chapter, not the end of your story. When selling is the proper choice for you and your family, give yourself permission and take time to grieve or celebrate however you’re wired. While talking to other entrepreneurs who have sold their businesses can be of value, keeping in mind some negative feedback may be their way of saying, ‘I wasn’t prepared.’
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The Psychological Stages
There are several predictable emotional stages you will probably experience as you move through each phase of a transaction. Take some time, hangout at each stage then ‘wipe your feet,’ and move forward with less anxiety and fewer surprises. Step out, feel and embrace:
Excitement and Anticipation. The dopamine rush of a potential deal on the horizon will have your mind running with images of life with newfound freedom and wealth. Keep in mind what goes up must come back down. We encourage our sellers to maintain healthy habits with diet, exercise and minimal alcohol. Your business case is a marathon, not a sprint; remember we’ve been where you are and everything we share with you is for a reason for you and your family.
Fear, Uncertainty and Doubt. The emotional valley will come and go often. “Am I making a mistake?” Hundreds of ‘what-ifs’ will race through your mind, sometimes in the middle of the night. Your deal, like thousands of other deals, tries to fail multiple times during a process. As your advisor, we stand in the gap to support you and keep you from jumping off the ledge to minimize the emotional swings. Just as you prepare to sell your life’s work, you must be prepared for the rollercoaster of emotions like a surfer rides waves in the ocean.
Shifting Who I Am. You made it; the deal has closed. You’re now a very wealthy person! Now what? As the captain of your ship for decades, it’s very normal to feel as if you’re in the middle of the ocean without wind and no working rudder chain directionless without your day-to-day role as the leader. Where possible, we encourage our clients to rollover a portion of their equity, work as an employee for 1-2 years for a second bite of the apple.
The Fallout
“Congrats on selling your business,” a longtime friend said the day after I signed the paperwork. “Now get ready for being depressed.” At the time, I played off the remark. Pfffft, I just made a shitton of money, built and sold my business, and was about to spend the year doing whatever the hell I wanted to. Depressed? Not!
“The problem with getting everything you want is you run out of reasons to keep trying.” – Markus Persson, Founder Minecraft, a $2B exit
When you spend years as the architect of your life around a business and suddenly it’s gone, you’re going to have some dark days wondering in the quiet. Sudden wealth can shape the dynamics of relationships, some favorably and some can be manipulative…beware. Not unlike how 20-somethings who were in college one day and the next they’re NFL millionaires. The game is very similar!
How are you going to respond when family members ask for money?
How will this financial freedom impact friendships?
As you explore what the next chapter may look like, it’s important to identify what will be your ‘reasons to keep trying.’ Hindsight being absolutely 20-20, here are some thoughts to consider:
- Observe what others experienced through their sale.
- Moving on from your life’s work is a rewarding reinvention process that begins with a passion.
- Life’s not always roses; be grateful for what you have.
- We’ll guide you in developing a game plan from Day One, and
- Day One is the flip side of succession planning.
Regardless, what you choose to do and adopt for your best next step forward, you want someone on your team who can advocate for you as a whole person, someone who will stand in the gap with you as a thought partner and provide some guidance and structure through the transition. We have gone through this process and helped others through it. We’re here if you’d like to have a confidential conversation about what a process may look like for you.
