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CEOs

How CEOs Can Avoid Seller’s Remorse

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Euphoria, exhilaration, and relief are the emotions that most business owners expect to feel after selling a business. After all, this is the day you have long been waiting for; you may have spent years anticipating life post-sale.

One emotion that you probably don’t expect to feel is remorse. What could you possibly regret?

Business owners tend focus a lot on the financial aspects of the sale of a business. However, the non-financial aspects are equally important for a business owner and, if not addressed, can leave owners feeling irrelevant. Owners who are looking forward to a business transition may not realize that their identity and that of the business have on some level become one and the same. No one warns you when you start a business of how quickly your identity becomes tied up in your business.

Here are some of the things that we hear frequently from owners:

  • “I thought I would get a better price after all my years of hard work.”
  • “I had no idea I would pay so much in taxes and fees and net so little.”
  • “I never thought they would radically change the company…but they did.”

After investing so much in your business, it’s very easy to feel a sense of disappointment and loss once you are no longer in control, especially if things don’t turn out the way you’d hoped.

An owner may also feel responsible when the sale of his or her business has a negative impact on the family, the employees, or the community. The former owner feels he or she should have known more, been better prepared, and been able to better control the outcomes.

Unfortunately, you rarely get a second chance. The sale of a business is not a dress rehearsal; you usually get one opportunity in a lifetime.
[pull_right]The sale of a business is not a dress rehearsal.[/pull_right]

Fortunately, there are steps owners can take to avoid regret:

  • Devote some serious time to figuring out what you want to do after you sell. You have most likely spent all of your time, money, and energy on your business, and it will take time to separate your identity from your role in the business.
  • Gradually spend more time away to gain the time and space you need to identify your goals and objectives and envision yourself without your business.
  • Calculate your wealth gap, i.e., how much money you will need to net from this transition in order to achieve your financial goals.
  • Determine how your transition will impact and affect employees, family (those involved and not involved in the business), customers, community, and your legacy.
  • Understand your transition options and the pros and cons of each before making a decision.
  • Be proactive; don’t procrastinate.
  • Allow sufficient time (we recommend 3 to 5 years) to plan for the financial and personal aspects of this major transition.

Only you can figure out each of these pieces to the post-transition puzzle, and it will take time. Most of the disappointment owners feel after selling a business can be avoided by developing a comprehensive business transition plan with the assistance of seasoned advisors. The best years of your life need not be spent wishing you could have achieved a different outcome with the sale of your company. Preparation is the best guard against seller’s remorse.

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