Learn From My Mistakes, Please!
"Hindsight bias makes surprises vanish."
Not long after the sale of my most recent company, my wife and I took the kids on a trip, some might consider insane. All seven of us rented an RV and took a Griswold-style family vacation to South Dakota. We saw the world's largest ball of twine in Dassel, Minnesota; learned how pipes were made in Pipestone, Minnesota; wandered through the Black Hills; and spent a night in a Walmart parking lot. It was a wonderful, easy trip that left us with amazing memories. We checked it off our bucket list as one of our favorites.
On that trip, I took the time to reflect and compare this trip to a family trip we took from San Francisco to San Diego after the sale of my first company. The way I felt on the family trip to South Dakota and how I felt on the California trip following the sale of that first company were worlds apart. Following the first sale, I couldn't enjoy my time off because I kept reflecting on what I wished I'd done leading up to the sale. I enjoyed every minute of our South Dakota trip, including staring at the long stretches of road in the Dakotas from the windshield of our RV, which was a much different view than the beautiful Pacific Coast. I enjoyed it more because my mind was clear. After decades of buying and selling businesses, I knew how to walk away from a sale with no regrets. It's a wonderful, freeing experience.
Of all the lessons I've learned about buying and selling businesses, the one lesson I want to save every business owner from learning firsthand is leaving a sale with regrets. That, in itself, is the reason I wrote No Regrets, How to Grow and Then Exit Your Business, Emotionally and Financially Strong.
I've seen far too many sellers—myself included—suffer emotional, physical, and psychological pain because they didn't take the time to really think through the sale before putting their businesses on the market.
The minute I started working through the sale of my first business, I knew I wasn't headed down a good path. I knew it in my heart and felt it in my bones. The closer we got to announcing the sale, the worse those feelings got. During the weeks following the announcement, I couldn't focus. I couldn't turn my eyes away from my clearly disappointed employees or from my customers, who, instead of calling to chat, called to unload about their dismay over the changes. Sadly, their complaints were valid, and I knew it. I started taking more headache medication for migraines and dreaded going into the business I had created. It was a terrible experience, one I learned how not to repeat.
My most recent sale, of course, was a completely different experience. By following an exit strategy, developing a growth strategy, finding synergies for buyers, vetting buyers, and very clearly defining our transition plans and roles for our employees after the sale, I walked away from that sale without a single regret, emotional or otherwise.
"The lessons I learned about selling a business between my first and most recent sales are what I don't want you to learn firsthand."
After you sell your business, I don't want you feeling like you've let everyone down. I don't want you avoiding employees, customers, or vendors because you didn't have enough foresight to really think through the sale. I don't want you feeling good about that large post-sale check one minute only to find yourself scouring the Internet for some new business opportunity the next. I don't want you feeling lost, alone, and full of regrets.
After you close, I want you racing down the highway, the wind in your hair, as you head toward dinner with your top employees, the buyer, and your family to celebrate the sale. I want to give you the tools I wish someone had given me before selling my first business.
It doesn't matter if you do $200,000 or $200 million in revenue a year. At some point, all of us will leave the businesses we created. Maybe we leave it when our time comes, and we have to leave the world we know behind. Maybe we pass it on to a family member. Maybe we close it, or maybe we sell it. Of those exit options, the only option we can control is selling it. You can choose whether to sell your business for the wrong reasons, for the wrong amount, at the wrong time. Or, you can choose the path of no regrets.
If you're considering selling your business in 2022 and whether you work with our team or another advisor, if we do our job, you will understand the planning process for selling your business. As well as the steps you'll need to take to close a sale and the questions you'll need to ask so that when you're ready, you can sell your business without regrets. First and foremost, you should feel comfortable and confident about developing your exit strategy. It will serve as your road map toward your desired exit. Trust that road map. Know that it will lead you to the best exit for you, your employees, your customers, and the buyer. Next, develop a growth strategy. Complete a SWOT analysis, take a close look at your strengths and weaknesses and your competitors and their market share, and create a plan to grow your percentage of that market.
After you've developed those exit and growth strategies and defined your why, what, when, and won't, bring on a phenomenal group of external and internal advisors to help you with the sale, define what you do and do not want from the sale financially and emotionally before you start looking for buyers, understand valuations, and really make an effort to add value to the buyers in which you have the most interest.
Let your advisors do their magic. Let them negotiate on behalf of that exit strategy so you can keep your emotions out of it. Let them guide you through the steps to closing your sale, but use the information in No Regrets to ensure your exit and your outcomes align. Choose an advisor that, more than knowing your industry, is committed to knowing you and what you most want from the sale. Trust that your advisor has your best interests at hand and will work tirelessly to develop a sale that leaves you with no regrets.
I recently worked with a couple preparing to shut down and liquidate their twenty-six-year-old family business. Before I talked to them, they thought liquidation was the only way to get out of the business. After speaking with them, I helped them transform their business into a growing, highly sought-after company. They entered into a sale that was right for them and left them with no regrets. Working with businesses owners like this gives me so much joy. I love helping entrepreneurs fulfill their dreams of growing and exiting their businesses with the best possible outcome.
Whatever outcome you desire for the sale of your business, I sincerely hope the mistakes I learned after selling six of my own companies—several to Fortune 100 and Fortune 500 companies—benefits you. If in five years you look back on the sale of your business and the lessons you've learned in No Regrets and say, "I'm so glad I did," rather than, "I wish I would have," then I've done my job.
After working through an exit strategy, if you decide that you want to continue with your plan to sell your business and you know a great advisor, that's great. Contact him or her immediately so they can work through every step of the processes outlined in No Regrets. However, if you don't know an advisor or don't find yourself connecting to your advisor, Paradise Capital can help. We specialize in helping business owners maximize the financial outcomes from their sale while also minimizing the emotional elements of selling.
Here's to your successful, No Regrets sale!
Paul Niccum is a Business Strategist and author of No Regrets, How to Grow and Then Exit Your Business, Emotionally and Financially Strong! and GrowNOW! Your Fast Path to Growth.
After building six businesses and selling numerous companies to publicly held companies, Paradise Capital CEO Paul Niccum has faced the same fears and emotional concerns that all sellers face. He's both a seller and a buyer—Paul has also acquired eight businesses for his own companies and has been involved in the sale of over 100 companies during his career.