Home Services About Jeff Blog FAQ Contact My Library Book Discovery Session Login

I'll NEVER Sell My Business

Apr 27, 2020

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:

  • I’ll never sell my business; I love it too much. After all, what would I do, if I didn’t have my business?
  • I will leave my business to my children.
  • Give me a million bucks and I’ll walk away today.

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:

  • You will need to finance the business purchase because most children won’t be able to pay you for the full value of your business up front. This results in a tenuous retirement for you that’s dependent on the business’s future success; and it will result in enormous debt by your child who may or may not feel like the business was worth that burden.
  • You must ensure that your children are passionate about your business. The odds of this happening are quite low. Most children are gifted and called to different passions than their parents.
  • Plan on getting less for your business than you will with a business or person who can amplify the value you’ve created in your business.
  • Employees shy away from these situations because they know family enterprises limit their ability to advance.

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. 

Now What?

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

or

a slave in your personal prison?

If you picked the first option, you will benefit yourself, your family, your employees and your customers.

Register for this 45-minute webinar to learn more

Close

50% Complete

Get Weekly Updates

I write a blog post and record a podcast weekly. I write/talk on business advice, small business turn around stories, political interaction with business, business mindset and spiritual intersection with business matters. If you want to get email reminders when I post something new, please sign up.