What's the biggest LIE Small Business Owners Tell Themselves?
"I'll NEVER sell my business!"
I’ve been a small business owner most of my professional life, and I now coach other small business owners. One of my standard questions is, “When will you sell your business?” Here are the three most common answers:
Every once in a great while, someone will respond with a specific time frame, but not have a realistic idea of the amount they need for the sale of their business.
In this blog post, I’ll tell you why each one of these common answers is damaging to the business owner, their employees, and their customers.
The NEVER Sellers
I believe that deep down inside the NEVER-Sellers know they are lying to themselves. The reality is that everyone exits their business at some point. They’ll either talk their kids into taking over; they’ll walk away and close the doors; they’ll die; they’ll suffer a debilitating ailment that will end in bankruptcy; or they’ll sell their business and retire comfortably leaving their business in the hands of someone who values what they’ve built over a lifetime.
Once the NEVER-Sellers come to the realization that they will need to sell at some point, they come up with a silly answer like, “I’ll sell it for a million-dollars!” never fully understanding how they’ll create that million-dollar value.
The Family Businesses
Leaving your business to a family member has its advantages and disadvantages. Some families do well working together, but most struggle and pull their family problems into their business creating an amazingly dysfunctional business and family.
If this is your plan, here are some things to keep in mind:
There are many family business succession plans that work out well. Just be aware of the challenges.
Pay Me to Leave
The folks who want a big payday to entice them to leave are the same people who will immediately quit their job when they win the lottery. I get it. Owning a business is hard work and you sometimes feel that if you got enough money, you could stop working.
Unfortunately, selling a business never works this way. Buyers pay you money for your business based on the transferable value you’ve created in your business. Sadly, that “transferable value” in the eyes of the buyer is often-times much lower than the amount the business owner wants to extricate themselves from their business.
In fact, the hard it is to work in your business, the less likely it is that a buyer wants to purchase your burdens.
Selling Your Business Matters
Here’s where I’m going with this discussion. The reason I ask this question in my coaching conversations is that a business owner will be “floating”, if they haven’t thought of their business exit. And, “floating” people rarely achieve goals or live with the kind of intention that brings contentment to life.
It’s rather like spirituality or death. Few want to think about it. The see planning as some sort of waste of time. Enjoy your time now and don’t dwell on the future. The folks who do think about it and plan their lives tend to live more full lives in the present. Why? Because they are creating a life with meaning and substance. Otherwise, you will live for the most immediate pleasure. In Christian theology, we call this living by “the flesh” instead of living by “the Spirit”.
It’s Our Nature NOT to Plan
If living intentionally and making business exit plans is so beneficial, why do business owners resist business planning like the plague?
Most see planning as a waste of time and not immediately beneficial. Small business owners must make payroll; or have a pending layoff; or a pending hire; or pending building purchase; or a pending sale; or pending customer complaint… or some other distraction that is ALWAYS more important. If you make a long-term plan, the chances are quite high that you will have to re-plan once some unforeseen obstacle gets placed in your way.
Dwight D. Eisenhower said it best when he said, “What is important is seldom urgent and what is urgent is seldom important.”
Yes, long-term plans will be disrupted. Yes, it takes valuable time to plan. But this planning component is literally the point of separation for business owners who successfully grow their businesses and those who struggle to make money in the moment.
Two Heads are Better than One
As a small business coach, you may expect me to expound the advantage of hiring a coach… and so I won’t disappoint you 😊
If you sit down in front of your computer with a spreadsheet and calculate out your next 10-years and how you’ll sell your business for millions one day, you will omit many key elements. Why? Because, you’ve never sold a business. You see your business from your perspective and not the buyers. You will miss key elements of your business that buyers will desperately need when you try to sell.
Think about it this way. Let’s say that you buy a fixer-upper house, that you want to sell for a profit someday. You get in the house and notice the shower is leaking, so you fix the plumbing. Then, you notice the roof is leaking and so you patch your roof. You add a few kids to your family and decide you’ll build an addition. Then grandma wants to move in and so you build another addition. All the while you’re building and repairing this fixer-upper, you noticed your house is sinking on one side. Why? Because, you failed to fix the foundation before you made all your repairs and additions.
A business is a hundred times more complicated than a house. Of course, a professional business coach who understands the business valuation process and selling process can help you create a business of impeccable value. This impeccable value will benefit you while you own and grow your business; and it will generate personal wealth for you when it’s time to exit your business.
I started, grew, and sold my own multi-million-dollar business. I now coach others who want to do the same. What if you could learn how to inject value into your business that will benefit you now and in your future. Please don’t languish in your business. Ask yourself, would you rather be:
a creator who will sell their business one day
a slave in your personal prison?
If you picked the first option, you will benefit yourself, your family, your employees and your customers.
As a business coach and 30-year business veteran, I help my business owner clients change their mindset in a way that allows them the freedom and profitability they’ve always hoped for, but never thought possible. If you’d like to develop a successful business mindset, I offer online training along with individual and group coaching sessions.