Some years ago, I guided the sales process of a business in engineering and we realized a successful transaction. The two selling DGAs (mid-50'ers) had worked together for a long time and made a nice business out of it.
The buyer was enthusiastic and impressed and determined to go full steam ahead for growth. Part of the transaction terms was an earn-out arrangement for 3 years. The selling DGAs would stay with it that long and were confident they would live up to those earn-outs. However, both DGAs would scale back from (almost) full time employment to 2 days a week with corresponding fees.
Buyer and sellers got along fine and respected each other, as they should. The management of the business simply remained with the general manager (salaried) and the two selling DGAs (a technical director and a commercial director), so nothing really changed.
(In)expendable
The technical director was already downsizing a bit before the sale and had no problem switching back to working 2 days a week. He had plenty of hobbies and had already made himself fairly expendable in the business. And for an exciting technical job, they could always call him up. The more complicated, the better. Other than that, he enjoyed himself just fine and was able to fill his obtained private time just fine.
It was very different with the commercial director. He felt he could not be missed and continued to work 5 days a week. And if necessary also on weekends. And even though he only got paid for 2 days, he worked 5. When that went on a bit longer, the buyer anyway just adjusted his fee to a level more appropriate to full time employment. The ex-DGA was not concerned about the money, he just felt that the business could not do without his sales successes.
Saying goodbye
The business's revenue and profits continued to grow over the three years of the earn-out arrangement, and the earn-outs were all fully realized.
As the end of the earn-out period approached, the buyer informed the two selling DGAs that the cooperation agreement with them would be terminated. The (partly new) management had to stand on their own two feet now, and surely they could not continue to rely on the efforts of the two ex-DGAs forever.
The technical director was fine with it. It had been fine. The business would be fine. They had provided a good buyer and transferred the business well. He was satisfied and would enjoy himself.
The commercial director, on the other hand, was severely disappointed and frustrated. How could they cast aside the company's best salesman? He had little confidence in the other salespeople. And his customers were going to miss him, because he was always available. Besides, what was he to do if he could no longer work for the business? The business was his life. He didn't have many hobbies. How was he going to fill his time? The closer the farewell approached, the more frustrated and restless he became. He stopped sleeping and finally sought professional help.
Make yourself redundant
The times I still spoke to both ex-DGAs, I saw a happy ex-technical director, who had found a new balance in his life. But the contrast with the ex-commercial director could not have been greater. That one sat there lost, still having professional help and still searching for a new balance in his life. I hope and assume that things will eventually work out for him.
The lesson that can (should) be drawn from this: make sure that - when you sell your business - you don't fall into a hole.
Take a step back well in advance and make yourself redundant. This is not only better for yourself, but also for the buyer and for the business itself. Develop hobbies and think carefully about the era that dawns after your departure.
Put yourself in perspective and remember: no one is indispensable. You've had the opportunity to run the business for a while, but now it's time for a successor. The business will just keep going because it has "eternal life"; you don't, so sincerely say goodbye and go do something else with your life.
