So, you’re struggling to let go.
It can feel excruciating to let go of that precious vine, can’t it? It’s like an extension of your very own life, which you sweat blood and tears to grow and nurture.
I get it. As an owner, I am walking in those same shoes.
When you’re faced with the real possibility of not knowing an outcome, one which you have very little control over, the ensuing anxiety can be crippling.
After all, there’s no guarantee that a potential buyer of your tech firm won’t make changes that you won’t agree with, or worse yet, mistreat your employees who are like family to you.
Not to mention, much of your identity is tied to your firm. You care about this identity. It is your reputation that you have labored hard to build and you worry that something will go horribly wrong because a buyer screws up what you’ve built with your own two hands.
What do you do if you’re afraid to let go?
First, you have to remember why you’re selling.
You’re selling so you can get into your next life stage.
It’s natural to feel skeptical when selling your firm. It’s difficult to let go and trust the process. But, you won’t always be able to own, run, and manage your firm. You’ll eventually have to sell it. Why not sell it on your own terms, rather than at a point where you’re forced to sell it? Remembering your ‘why’, as Simon Sinek talks about, will help you overcome your skepticism and fear of letting go.
Second, try and identify the source of your fear and then take action to address it.
By doing this you’re taking action to overcome your fear. In some cases, you might learn things about your firm during the transaction process that you need to improve. It might mean improving your firm through strategic initiatives like specializing your product or service because of feedback you received as part of the transaction. Or, perhaps you’ve learned that you need a better sales and marketing strategy in order to grow/promote your product/service. Either way, if fears like this are occupying your brain, addressing these will help as you move forward in selling your firm.
Third, as hard as it is, understand that your identity isn’t tied to your business.
If there’s one universal fear in life, it is fear of the unknown. It can be hard to imagine what life will be like when you no longer own your business.
- What will motivate you to get out of bed in the morning?
- Will you lose your standing in your industry or community?
- What if you get bored after three months and regret that you sold?
And so goes the internal dialogue as fear feeds on itself and the decision to sell gets put off until next year — or maybe the year after. Selling your tech firm(s) comes with two inevitable feelings: resistance and loss. The degree to which you experience these emotions will depend on your situation, but assume that you will feel them nonetheless. Selling a business is easier when you plan well in advance. Figuring out what you will do with your life post-sale should be part of your overall exit plan. Don’t be afraid to lean on members of your support system, or even spend a few hours with a therapist to help you transition from business owner to your next act.
The last couple of reasons you might be fearful of letting go is a combination of making a mistake, and/or getting taken advantage of.
Many business owners correctly sense that the process of selling a business is complex, difficult, and loaded with landmines and traps.
From poor deal structures, to missing legal nuances, to paying too much in taxes, there are countless details that need to be addressed when selling your business. The best way to overcome this fear is to hire good advisors to assist you with the process.
At a minimum these typically include an accountant, attorney and an M&A advisor, like the team at iT Valuations. Others whose advice you may need to seek are your financial advisor, estate-planning attorney, and your banker. Wise advisors pay for themselves by helping you avoid costly mistakes.
You’ll also want to avoid getting taken advantage of.
I’ve met a number of sellers who seem to slip into a state of paranoia as the closing table looms larger on the horizon. It’ll be easy to fall into the trap of feeling like everyone is working against you. The best way to work through these fears is to take control of deciding how and when you will exit your business. This allows you to move forward with confidence in your own decision-making, and have faith in both the process and the people surrounding you.
Lastly, you’ll wonder (more like stress over) if the buyer will stop paying.
While this rarely happens, it’s definitely something to talk through during the process. In reality, 90% of all transactions have a gainshare or earnout as part of the terms. Everyone has heard the horror stories, but the reality is 76% of the time the earnout pays out at or above the expected levels.
This fear should melt away after you’ve completed your due diligence on the buyer and become comfortable with them running your firm. The ideal buyer should share your same core values and corporate culture, and bring fresh resources to the table that you may have lacked, like management expertise, financial acumen or access to additional growth capital. Regardless of how much you hold back, make sure it is secured by something, like a personal guarantee from the buyer. As a friend of mine likes to say, “if you’re being asked to be the bank, then act like a bank.”
While there are many reasonable fears that go along with selling your business, there are also ways to mitigate them altogether. Just don’t let fear take hold to the point that it prevents you from moving forward with plans for both your life and your business.
Once you’re complete with your transaction, and the M&A ink is dry, you’ll probably feel a sense of renewed purpose, reinvigorating a deeper motivation for life.
And, remember: You’re selling so you can get into your next life stage.
At iT Valuations, we help firms like yours determine value when it matters most, so you can stop fearing letting go of the vine and sell, and instead think about what life is like afterwards. To talk with us about how we can help you IT services business finally solve your selling-struggles, click here to contact us on our contact us page.