by Dominic Sheehan, Financial Adviser and Head of Advice at Cambridge Partners.
According to research conducted by the Exit Planning Institute, 75% of business owners ‘profoundly regret’ selling their business within one year, post transition⁽¹⁾. Why is this?
I have seen clients sell businesses for millions of dollars – that should make you happy, right?
One day, they are the owner and director of a successful company. Their business provides them with income, purpose, prestige, and it consumes a huge amount of their time. The next day (following the sale), they are unemployed, have no income stream (all be it with a few million dollars in the bank), time on their hands and they start to grapple with the questions – ‘who am I’ and ‘what should I do with my time and money’?
As a Financial Adviser, I have the privilege of meeting and gaining insight into some amazing people with fascinating circumstances. One of the most interesting activities I get involved in is helping business owners prepare to sell their business.
When selling a business, owners need support from their accountant for financial statement preparation, tax advice, indicative valuations etc. They need support from their lawyer for sale and purchase agreement preparation, broker engagement agreement reviews, shareholder agreement development etc. Often, they may also need a business broker or deal adviser to help them position, market, and sell their business.
But which of these advisers is focused on the people behind the sale? Helping the exiting owners start the process, introducing them to the right people, helping them prepare for life after the sale, and ensuring the exiting owners can afford to live the life they want?
If you are considering selling your business, you may want to look at the checklist I have prepared. It provides an overview of the team you will need to assemble, the activities you will need to consider, and the questions you will need to ask to sell your business for what it’s worth and avoid regret.