Clarion Wealth Planning’s independent study into the psychology of selling a business has revealed the best guidance when planning a sale comes from those who had been through the experience – and the professionals.
A sale of a business may be more difficult and prolonged than many owners expected.
Ron Walker, founder of Clarion Wealth, said: “Guidance from professionals and advice from others who have been through the process themselves could prove invaluable in mitigating the emotional trauma of selling something into which they have poured their life and energy.”
Hazel Carter-Showel, managing director of Carter Corson Business Psychologists which was commissioned to carry out the research, said: “I was not surprised that the people I interviewed valued good advice from advisors who recognised that, for most, selling a business is ‘like having your soul ripped out’, and that the right deal considers the needs of those who matter to the person who gave everything they had to build it.
The pioneering project Enough Now revealed the value of good advice from professionals and words of wisdom from those who have lived it
Hazel added: “Taking the advice of people who have been there and done it seems to be the only thing that might have helped. The advice [in the Enough Now report] represents the distilled experience of over three centuries in business.”
Five clear themes emerged when former business owners were asked what advice they would give to someone else going through an exit: get your priorities right; get the right deal – not necessarily the best deal; get the right advice – you need specialists and it is worth paying; take your time; and look after yourself.
‘People matter – I was blinkered, not paying much attention’
‘Business not the be all and end all in life’
‘Less stress and less money is ok’ ‘Do something you enjoy’
‘Do right thing for the business, not the deal. Recognise the deal is not about you.’
Sellers stressed the importance of getting the right buyer. ‘Culture fit not just commercial fit is vital in a people business.’ One regretful former owner said: ‘Should have looked at impact on business.’
A business owner noted the selling process was ‘Unbelievably complex, full of pitfalls, so need professional input’.
‘Don’t do it on your own’ and ‘Need to have the right advisors with right experience’ were all recurring themes and particularly valued was financial advice.
‘Make sure advisors really understand what you want’ ‘Who’s doing the deal for you? You need someone you get on with personally.’
‘Don’t get a lot of advisors but do get a lot of advice’ seemed to be a particularly pertinent point.
‘Get healthcheck list before you think of selling. Build systems and processes two or three years before. Get accounts/sales forecasting in place, understand where in market you are’
‘Be mindful of the exit you want.’
‘Try to avoid cultural shock wave going through your people’
‘Stay healthy’ is a mantra heard a lot post-sale – both physically and mentally. ‘Personal resilience is key. Sport helps to manage difficult times.’
‘Appreciate value of someone to talk to – need an outlet’ ‘Flood mind with positivity – it helps’
And if retirement follows the sale, wise heads observed: ‘Know what to do after – if you stop, have some sort of role.’ And the final word for moving into the non-working world: ‘Best advice? Have an answer for “what do you do?”’
Hazel said: “There may be some in the advisory community who may need to ask more questions about what the ‘right’ deal actually means. I hope it reinforces that most business owners are not just focused on the bottom line.”
In terms of selecting professional advisors, people who used a competitive selection process had a more positive experience overall. However, the exception was where a prior advisory relationship was very long-standing and characterised by high levels of trust and a deep understanding of the business. These advisors were better placed to understand that the right deal mattered more than the best deal financially.
Corporate finance, bankers and accountants are cited most often as providing the most help, only one referred to their lawyer as being the most helpful.
For information on how we can support you through a business sale, please contact John Winstanley at firstname.lastname@example.org or call 01625 466360
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