//

Selling My First Business – Without Expert Help

Not knowing the process and what to expect in the sale of my business was brutal and expensive.

Photo by rawpixel.com from Pexels.

I didn’t have an intermediary to assist me the first time I sold my business, but I wish I had. Back then I didn’t know that there were intermediaries who could help in the process. Plus, to make matters worse, I had already been approached by a buyer. Not knowing the process of how to work with a buyer on a large scale was not good for me.

Mind you, I was smart about how to run my business. I had built the business from nothing into a national retail and distribution business. I was well known in the industry and in the top 25 of my business category in the United States — and still growing. I had bought and sold probably 10 to 15 businesses by then, so I thought I was pretty sharp. However, I was wrong. I may have known what I was doing when it came to operating my business and buying and selling businesses from other businesspeople like myself, but I was unprepared for the sale of my business to a financial buyer—and it cost me dearly.

When I say “financial buyer,” I am referring to someone who has worked previously in mergers and acquisitions or in the financial world, where they’ve taken other people’s money and invested it to get a favorable return, as a private equity group does. These buyers are willing to invest money into the purchase of a business, but they need to get a certain return on their investment or they’re not interested. It’s all about the numbers. They are not interested in the touchy-feely part of the business, or how attached you may be to the business, or how you have worked your entire life building the business. For them, it’s only about the numbers.

I was not just unprepared, but I also had no one who could help me. I tried talking to my accountant. Even though he was a good accountant and had done my profit and loss statements for years and filed my taxes, he was clueless on market valuation and what I should do. All he could do was crank out past profit and loss statements and provide copies of old tax returns for the due diligence. And my attorney, who was also a minority partner in my business, was not able to help either. He was an attorney who worked on wills and estates and local real estate deals. The sale of a business of the size I had created was foreign to him and over his head, and he admitted it.

So here I was with no backup team to help me through the selling process. I am sure you are thinking at this point: If you didn’t have anyone to help you through the process of selling the business, why didn’t you stop the sale and go get help?

Well, I couldn’t. Because the business was growing so fast, I had many orders, but I was running out of money even though the business was profitable. I had waited too long to assemble my team of players and had gotten myself in a jam. I needed the money—or many people would be losing their jobs. I would have been OK, but I didn’t want the people who had helped me build the business to lose their jobs. It was either lay a lot of people off and quit growing or sell and let the next person take it to a higher level, which would protect the people and allow them to keep their jobs. That is what I did.

However, not knowing the process and what to expect in the sale was brutal and expensive for me. I left money on the table. I never forgot the horrible and lost feelings I had during the due diligence process, wondering what I could have done differently and how I could get this over with.

So, when I work with a client on selling their business, they are not only getting the experience of someone who has done the process of selling a business hundreds of times, including selling my own businesses. They’re also getting someone who knows what that stress feels like in the bottom of their stomach, and I can empathize with them. It is what I call being able to offer my “expensive experience.”

I am fortunate that I got the deal done without going nuts. But then I was in my early 40s, had more energy, and didn’t know any better. Sometimes it pays to be young and foolish; but if you are in your 60s or beyond, I have found that things don’t roll off your back quite as easily as they did when you were younger. And selling your business at a later age is more serious, because you know that chances are, you are only going to get one shot at the sales process, and you want to be sure you get it done right.

Someone once said to me that it is OK to be young and broke, because you think you are going to live forever and think you have all the time in the world to make money. But you don’t want to be old and broke, because when you get older you realize that you are not going to live forever, and you only have a limited amount of time to get the money back!

This extract is adapted from Selling With Certainty: Straightforward Advice for Cashing In on the Full Value of Your Business by Terry Monroe ©2018 Clayton Investments, LLC and reproduced with permission from the author.

    The Thrive Global Community welcomes voices from many spheres. We publish pieces written by outside contributors with a wide range of opinions, which don’t necessarily reflect our own. Learn more or join us as a community member!
    Share your comments below. Please read our commenting guidelines before posting. If you have a concern about a comment, report it here.

    Sign up for the Thrive Global newsletter

    Will be used in accordance with our privacy policy.

    Thrive Global
    People look for retreats for themselves, in the country, by the coast, or in the hills . . . There is nowhere that a person can find a more peaceful and trouble-free retreat than in his own mind. . . . So constantly give yourself this retreat, and renew yourself.

    - MARCUS AURELIUS

    We use cookies on our site to give you the best experience possible. By continuing to browse the site, you agree to this use. For more information on how we use cookies, see our Privacy Policy.