Enjoying the sound of the ocean is part of enjoying the change in the journey to sell your business. Today we explore the fear of selling your business. Why do some people procrastinate? It's a real fear and let's explore why some of those fears stop people in their tracks. We welcome listeners to reach out to me at Gartly Advisory on 0395979966 or geoff@gartlyadvisory.com.au
Hey, welcome. My name's Geoff Gartly, welcome to my latest podcast. "
Wow, don't you like the sound of the ocean?"
That's probably somebody relaxing after they sold their business but, for some people, selling their business is hard. The fear of selling your business is a big thing. There's a lot of procrastination going on out there so today we're going to explore the fears of selling your business. Yeah, I get it, it's not going to be easy to sell your business, you've put in a lot of hard work. For many people, it's years of hard work and you're now coming to that decision, which is to when to sell your business.
For some people, they can't make that decision. For many, it's the end of the road, end of a lifetime, end of a career, and to make that realization that their business is about to finish up and their life's about to change, it's hard work so I get that. Of course, so that brings us to their first fear, it's a fear of the unknown. As one of my clients said when they sold their business, "The phone stops ringing, Geoff." Of course, it does. Of course, you change your lifestyle.
That's part of what we do at Exit Planning is to manage the future, look beyond the sale of the business to see how the money's going to flow, where the money's going to flow, and what are you going to do with your life to make you think about the future? Of course, for many people running their business gives them meaning. It's what they've done, it's what they've always done in their life. Of course, you may not wake up tomorrow and say I'm going to sell my business or today, it might be two, or three years down the track.
In doing so, it gives you time to plan so that the reliance on your life, on the business is not fully and the business reliance on you is not fully either. Over the next 12, 18 months as you consider your options, consider how you can transition out, how other people can take on your roles and you can make your business more valuable by being less available. Of course, the other thing that people worry about is their status, their social status in the community. Of course, that's a big fear because at the moment you're managing director of Widgets Proprietary Limited but after you sell your business you're managing director of what? Yep.
However, there's so much to do in the world, there's so much travelling. There's the ocean, there's the diving, there's the fishing. There's the golfing. There's catching up with friends and family. There's spending time more time with your partner. There are also other businesses, it's not the end of the road. It may be the end of the road for this business but using your capital and your proceeds from the business you could look elsewhere to do other things. Of course, not having a vision of what to do in your new life is one of the biggest things that people have so, as you can see from the theme of what we've been talking about in the last minute or so, the vision should start now, the vision for your company should start now, the vision for your future should start now.
It may be that you're selling down part of your business. It may be that you're in business with a couple of other people and you want to sell your share of the business or it may be that you want to sell your business to your family and transition out. Obviously, the family business is an interesting one because we've got kids involved who may have their own expectations. They may not be interested in your business but, of course, if you don't have that conversation, one, you'll never know and, two, you don't want to offend.
My suggestion is that, with the family business, is that you start treating the business as a business and that family members become part of the board of that business. Letting them know your intentions early is a really good way of making sure that at the end of the line your values and your expectations to your family members happen the way that you'd like them to happen. Of course, one of the big problems that people have is a fear of not having enough in the end. Of course, that's a real fear because are you going to get what you like for your business, are you going to get what you expect for your business, and are you going to have enough to live on afterwards? They're all interesting questions and one of the things that we suggest in the value build concept is to take a value build score.
That will obviously set the perimeter as to where you are at and ask someone like myself to give you a rough valuation of where your business is and what you need to do to get it to that stage that's ready for sale. Of course, there are certain areas that may prohibit a buyer from wanting to pay top dollar for your business and that could be the areas of the owner reliance, which is where there's too much reliance on you as a business owner within the business. There may be other impacts such as too few customers, and the market's changing. All those sorts of things come into play and we suggest that you take the time to look at that.
Now, of course, one of the biggest problems is if you don't actually take the fear and get hold of it and deal with it. The fear might actually strangle you because we might have a situation where your health becomes more important than running the business and, of course, then you've probably lost the opportunity to manage that process. The fears, do they sound familiar? Do any of these resonate with you? Of course, this isn't the end of the world, it's the start. It's the start of your journey to the next stage.
Of course, we call that part of exit planning. Thinking about and planning personally what is meaningful for you and what fulfils your life after your business, is a great aspect of what we do. It can be a painful process, but it is a process that can also be rewarding and give you a clear clarification of where you're heading. It's something that other people will look quite envious for. In doing the process, it's a personal process. It's also a business process, it's a financial process, and it's an emotional process, so there are those four elements that go into deciding to sell your business.
As business owners, we're not used to talking or considering our emotions when making decisions. Really, it becomes central to the success of how you move to your next life in how you sell your business so start the process and consider your options. Then, it doesn't have to be that you're selling your business this week, next week, or next year, it could be two or three years, but having thought about your exit plan will certainly give you clarity.
Next week, we're actually going to be talking about how you measure success. It's great to talk about business growth but let's set some parameters on the board about success, where we want to go, what success means to you, and what measures you should take to measure success in your business. Hope this has helped you today. Wishing you a great weekend. We'll talk to you very soon and take care.
Best wishes Geoff – geoff@gartlyadvisory.com.au