You want to sell a business. On the Internet you can find step-by-step plans to sell your business in the best possible way. What emotions can play a role during the sale of your business? Below you will find those steps, with the possible emotional side.
1. Pre-sale.
Why are you taking this big step? You're really done with it now, with that always being on? Or you're nearing retirement age. Or a buyer presents itself? Or you can't continue due to illness or burnout? Or you yourself are the brake on the further development of your business? Usually you have been playing with the idea of selling for some time, but it seems like an impossible or incalculable action. It feels chaotic and too exciting.
2. Decision.
You have made the decision to sell, and of course you would prefer to arrange the transfer immediately. As an entrepreneur, you're used to making decisions quickly. The decision feels pretty good. But there's a lot involved and maybe your business isn't quite ready for sale yet? You have worked very hard in and on this business for years. It's kind of your baby after all. Can such a choice really be a 100% decision? The doubts play out from time to time. The sales process seriously has a very emotional side.
3. Sales advisor.
Who is going to help you? How do you find the best-suited adviser? This is not something your bookkeeper or accountant does on the side. Via-via did you once hear a name? Through your accountant? Or searched online? And what if it doesn't click? You need good guidance, you have a lot of questions. You become quite insecure and restless because of what is involved. In addition, you also wonder what such an adviser will cost.
4. Value indication.
What is your business actually worth, expressed in money? Does the business have any value to anyone else? Or do you feel your business is worth an awful lot, even or especially without you as the owner? Who makes that calculation for you? Ah, that sales consultant can take care of that. And if you agree on the value, what will be the asking price? Or do you wait for a bid by a potential buyer? And in the meantime, will you invest or continue to stock or sell out? Choice stress.
5. Conditions.
What conditions do you put on the sale of your business? Will the shares of your limited liability company be sold, or will the assets from your business be sold? Will you cooperate for a while after transfer? Who will definitely (not) be allowed to buy it? What is being sold, are there any private items still displayed in the office? Are you selling the business premises as well? Has your landlord included a clause that if there is another owner, the lease will expire? What conditions does the bank set regarding repayment of the loan? How will that be repaid? What a lot is involved. It still feels chaotic, but your good adviser brings calm, insight and overview.
6. Confidentiality.
A confidentiality agreement is made between the parties. Your potential buyer is not allowed to talk about it with anyone, but of course neither are you. So not with part of the family, your friends, your staff, your clients. But when are you allowed to tell? What if people ask about it? It feels sneaky and not very nice.
7. Prepare information memorandum.
Together with the sales consultant, you draft the information memorandum; a kind of sales booklet. Mmm... Quite a nice business on paper, with nice figures and pictures. Do you really have to sell it? You become extra proud of what you have created.
8. Introduction interviews.
Interviews are held with several prospective buyers. What different cultures and different interests. Nice persons, but does this suit my staff and my customers, are the questions that keep coming to your mind. You also hear new ideas and think that you could work them out and take them up yourself. It gives you new energy?
9. Bidding and negotiation.
The potential buyer makes a decent offer, which of course is lower than expected. But the advisers will figure that out; they are busy negotiating. Perhaps adjusting some sales conditions. Nice, would be nice if that amount is credited to your bank account. Nice pension pot or to be used to pay off (tax or mortgage) debts.
10. Still not the right party.
The offer is lower than the amount you had in mind. Or you don't like each other at all, and it turns out not to be a good match after all. What a bummer. You don't feel like it anymore. How can we get closer together? De overname adviseur goes back to work for you. But it happens that the financial or cultural difference cannot be bridged and the deal blows up. You are angry or sad. Then you have to start all over again with one of the other candidates. That doesn't feel pleasant, but it's part of the deal. And secrecy remains in effect, so you can't talk freely about it either.
11. Letter of intent.
The purchase price is well agreed upon and many of the other conditions are already in place. In the letter of intent, a lot is already recorded that will later be included in the purchase agreement. Now it is getting very serious and you might think: can I go back? Or can it be done faster? Big steps are being taken again. Fine, but also exciting. Is it really going to happen?
12. Book examination.
The buyer's adviser commissions a book examination. The financial records, all tax returns, personnel records, IT system and associated licenses, insurance, all contracts with suppliers and customers, etc. are looked at. An awful lot has to be provided. What a hassle and what questions and comments. This costs the bookkeeper, controller, accountant a lot of time, which in turn costs money. And what is the effect on the agreed purchase price?
13. Purchase Agreement.
The purchase agreement is drafted. Indemnities and warranties are included, with penalty clauses. Salt is put on every slug. The lawyers/lawyers are very busy and the documents are provided with traceable adjustments. The buyer and seller seem (impatiently) to be on the sidelines. There is no end in sight. Why does so much need to be recorded in the first place? After the sale, you run the risk of having to pay back part of the purchase price for another period of time? That doesn't feel nice.
14. Financing.
The buyer can't pay the purchase price all at once, but must arrange financing. Can the buyer get it financed? What if it doesn't quite work out after all? Do you then also lend a portion to the buyer yourself, as a vendor loan? And then what are the conditions regarding repayment terms, interest rates, collateral, etc? Ah, that's where the sales consultant helps again. Now just hope that the buyer pays the installments nicely.
15. After-payment.
You know for sure that there are still nice orders coming and you actually want to enjoy them for a while. The buyer doesn't quite believe that. You agree that you will receive an extra after-payment for the coming fiscal year (earn out), which is why the purchase price could be set slightly lower. At the end of that financial year, you will receive a conditional payment if revenue exceeds a certain predetermined level. That feels nice, because you have already invested a lot of time and energy in these assignments.
16. Closing.
The moment of signing is there. The shares of your business are delivered to the buyer. Usually this moment is at least about six to nine months after the start. In retrospect, it has gone pretty fast. As the months go by, you also get more and more used to the idea that the business will soon no longer be yours. Together with the buyer and perhaps the lawyers and advisers, you sit at the notary to sign all the documents. A double feeling, joy, emptiness, sadness. Flowers and champagne? And the nice amount credited to your bank account.
17. Publicizing.
By now, your family and staff already know about the sale. Some of the customers and suppliers are also aware. But then another press release goes out and it is made known via LinkedIn or other social media. You receive varying reactions. Some are very happy for you and others think it might be an unwise move. Somewhere for a moment a feeling of doubt.
18. How to proceed.
You had to hand in everything; your bank card, your keys, your car, your laptop, your phone number? Or did you buy the car over? Do you work for a few more months or years for a proper transfer? Your powers may then suddenly be different. Do you like that? It takes some getting used to not being the owner anymore. Or do you leave right away? In any case, get rid of always being on.
19. And then?
You've signed a non-compete and non-solicitation agreement. So you're not going to pick up your old profession. You're going to enjoy well-deserved retirement or learn to stop being always on. Or you're going to take the time for your recovery. You have more time and attention for family, friends and your hobbies.
And suddenly you see other opportunities and challenges and new plans emerge. You are an entrepreneur for a reason. But first rest and be proud. What a process. An emotional rollercoaster.
