Are you psychologically ready to sell your business?

You may well have owned your business for decades, so you’ll no doubt have given it a great deal of thought before deciding to sell it and move on. Conversely, you may be looking to sell up after just a few years of running the firm because you feel the time is right to move on to your next project.

Regardless of how long you’ve owned your business, preparing yourself psychologically for the sale is more important than you may realise.

For instance, have you considered how you would react to not having daily contact with colleagues or feeling a sense of loss after exiting the firm? Similarly, have you thought about how you will spend your time in later life without your business to focus on?

The psychological impact of exiting your business warrants as much attention as anything else. Indeed, according to the Exit Planning Institute, 33% of business owners said it would be extremely emotional to exit their business.

So, read on to find out why it’s so important for you to prepare mentally for what’s to come once you have sold your business. You can also discover why working with an exit strategy specialist can make a huge difference.

Selling a business doesn’t happen overnight

When you are selling your business, it’s important to understand and appreciate that it can be very stressful and time-consuming. Indeed, many successful business exits take between six and 12 months to complete.

Given the length of time it can take to complete the sale, it’s essential that you make sure you are mentally and psychologically prepared to be in it for the long haul.

After all, a report by Forbes revealed that only 1 in 15 prospective business buyers complete the transaction. So, you should only plan your exit strategy when you’re completely mentally prepared for the bumps along the way.

Selling a business can cause uncertainty over the future

Selling or exiting your business is a monumental decision and it can often have a huge impact on your life. While it may well be something you’ve been considering for a while, you still may feel uncertain about what’s next. For many, not knowing what’s ahead can cause anxiety and stress.

One of the ways in which you can alleviate this risk is by having clear exit goals and having a plan in place for what happens next. Essentially, if you have a clear idea of what’s to come, you’ll be more likely to be psychologically ready for the sale.

To highlight this, a study by University College London revealed that respondents would rather know for certain that they’re going to get an electric shock than not be able to predict it. While an extreme example, the study details how people are far more content knowing what’s to come than not.

So, make sure you know exactly what the future holds for you once you’ve exited, whether that’s taking up a new opportunity elsewhere or enjoying your retirement. Having a plan in place will not only give you something to aim for but also allow you the peace of mind of knowing what’s in store for you.

Meanwhile, if you’re selling your business because you’re looking to retire, have you truly planned for what you’ll do?

Many UK adults struggle to adapt once they’ve stopped working. Indeed, a 2020 study by the charity Age UK revealed that more than 6 in 10 over-65s experience depression and anxiety. A potential cause of this is the struggle to adapt to the loss of purpose that working provides and the isolation that comes from reduced social interaction.

So, if you’ve always been someone who keeps yourself busy, create a plan so that you have some definitive goals for what you will do during retirement. That could be anything as simple as spending time with your grandchildren to visiting that exotic location you’ve always dreamed of.

Many business sellers feel a sense of loss once they’ve exited the firm

Many business owners underestimate how overwhelming the feeling of loss can be when you are selling your business, especially if you’ve owned it for many years.

After all, it’s likely that you will have put years of time, money, work, and dedication into making the business a success. You may also feel that your business partially defines who you are as an individual.

It’s important to consider just how selling your business will affect you. Will you be able to move on without regrets and have confidence that you made the right decision?

When selling your business, make sure you have a good reason to sell so that you have full confidence in the reasoning behind your exit and your motivations for leaving.

Similarly, it may be worth discussing your feelings with friends and family before, during, and after the sale so that you can acknowledge how the change may affect you and prepare mentally for it.

Indeed, having a plan in place can be a very effective way of helping you adjust to this major change in your life and give you something to aim for. Doing so may help you to look forward, not back.

This is where speaking with an experienced exit specialist and financial planner can help. They will act as a sounding board for your decision-making and help you identify your exit goals.

When leaving, you could miss out on regular social interaction

If you leave the firm entirely, you most likely won’t have the daily contact with colleagues that you’re used to. Indeed, many business sellers feel isolated without the social interaction of being around their co-workers and friends.

So, if you have built your social life around your career, retirement can present stern challenges when it comes to social interaction. You need to consider this and whether you are mentally and psychologically prepared for this change.

It may well be worth discussing with your colleagues and friends what will happen once you’ve exited the firm. You may want to arrange regular meetups so that you can keep in contact and maintain this valuable social connection.

Peace of mind comes from working with professional exit specialists

If you don’t have a clear plan in place and are worried you won’t have enough money to do everything you want to do once you’ve exited your business, you’re unlikely to be psychologically ready.

This is when working with experienced exit strategists can make a huge difference. We can help you identify your goals, devise a plan for your next steps, and utilise cashflow modelling to establish whether you have “enough” to achieve your goals.

Additionally, knowing that you have professionals in your corner helping you through the entire sale will give you the confidence and peace of mind that you need to successfully exit your business.

So, email enquiries@clarionwealth.co.uk or call us on 01625 466360 to find out what we can do for you.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate cashflow planning.