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In this, our second article, I’m going to focus on what things business owners need to be prepared for when selling their business.\u003c/p>\u003cp >Most owners know the obvious things they need to be prepared for when selling their business, such as having to provide documentation nine ways from Sunday, anticipating a tough negotiation process, etc. But there are many other things that owners need to be prepared for that sometimes fly a little below the radar, but are very important for having a successful transaction. Some of these include:\u003c/p>\u003cul >\u003cli >Managing expectations \u003c/li>\u003cli >Lack of interest from buyers \u003c/li>\u003cli >Employee and customer retention strategies\u003c/li>\u003cli >Having a back-up plan\u003c/li>\u003cli >Emotional preparedness \u003c/li>\u003c/ul>\u003ch3 >Managing Expectations\u003c/h3>\u003cp >Let’s start with managing expectations. One of the most important things an owner who’s selling their business needs to be prepared for is managing their own expectations. And one of the most common areas in which they need to do that is in anticipating the selling price of their business. It’s completely understandable for owners to have high hopes for the price at which their business sells, but at the same time they have to remain realistic. Plenty of factors drive unrealistic sale price expectations, but one of the most common ones is the overvaluation of assets such as equipment, real estate, intellectual property, and the like. While these assets certainly have value, that value as the business owner sees it, may not align with the market’s assessment. Being prepared to manage your expectations reasonably in this area is critical.\u003c/p>\u003cp >The expectation of a higher sale price also results from the fact that many owners have a deep emotional attachment to their business. It makes perfect sense, owners put countless hours of grit, determination and sweat equity into their businesses. They recall the lean years, how they fought to survive and went on to thrive, and believe that that should be reflected in the sale price. Unfortunately, the buyer doesn’t share that sentiment and is unlikely to factor the owner’s journey into their offer price.\u003c/p>\u003cp >And of course, many owners expect there will be a “perfect” time to sell…and they wait for it to come. But as result, they potentially miss other very good opportunities to sell. Yes, there are certainly great times to sell and bad times to sell, and possibly a right time to sell. But waiting for the "perfect" time to sell can set up unrealistic expectations, so being prepared to manage that expectation is advised. Because truthfully, the “perfect” time to sell is whenever someone is willing to buy your business at your price and on your terms.\u003c/p>","children":[]},"type":"text","cl":"text pROFMlP3ix"},{"key":"eDpiwBqHX4O","content":{"children":[]},"type":"section","children":["ecGs_cyFwT0"],"cl":"section"},{"key":"e6YdtXL7oeC","content":{"cont":{"tablet":{"params":{"trigger":"Load","updated":1689260017463,"LoadAnimation":{"duration":2,"delay":0,"once":true,"loop":false,"translateX":["300px","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}},"desktop":{"params":{"trigger":"Load","updated":1689260017463,"LoadAnimation":{"duration":2,"delay":0,"once":true,"loop":false,"translateX":["300px","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}},"mobile":{"params":{"trigger":"Load","updated":1689260017463,"LoadAnimation":{"duration":2,"delay":0,"once":true,"loop":false,"translateX":["300px","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}}},"children":[]},"type":"w75y8u1c","cl":"w75y8u1c p29QNIuKP3"},{"key":"enTSTzlq9IT","content":{"children":[]},"type":"frame","actions":["e6YdtXL7oeC"],"cl":"frame"},{"key":"eRAykUNryHR","content":{"cont":{"tablet":{"params":{"trigger":"Load","updated":1617719614531,"LoadAnimation":{"duration":5,"delay":0,"loop":true,"scale":0.95,"preset":"pulsate","easing":"easeInOutQuad"}}},"desktop":{"params":{"trigger":"Load","updated":1617719614531,"LoadAnimation":{"duration":5,"delay":0,"loop":true,"scale":0.95,"preset":"pulsate","easing":"easeInOutQuad"}}},"mobile":{"params":{"trigger":"Load","updated":1617719614531,"LoadAnimation":{"duration":5,"delay":0,"loop":true,"scale":0.95,"preset":"pulsate","easing":"easeInOutQuad"}}}},"children":[]},"type":"w75y8u1c","cl":"w75y8u1c pLvz4DOTiQ"},{"key":"eKu4yVGv0o-","content":{"text":"\u003cblockquote >Many owners expect there will be a “perfect” time to sell.\u003c/blockquote>","children":[]},"type":"text","actions":["eRAykUNryHR"],"cl":"text pROFMlP3ix"},{"key":"e_fVdT208ic","content":{"children":[]},"type":"rectangle","cl":"rectangle"},{"key":"ewcrpsgtXPz","content":{"children":[]},"type":"rectangle","cl":"rectangle"},{"key":"eTFiGTOKRd5","content":{"cont":{"tablet":{"params":{"trigger":"Load","updated":1689259986895,"LoadAnimation":{"duration":2,"delay":0,"once":true,"loop":false,"translateX":["-300","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}},"desktop":{"params":{"trigger":"Load","updated":1689259986895,"LoadAnimation":{"duration":2,"delay":0,"once":true,"loop":false,"translateX":["-300","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}},"mobile":{"params":{"trigger":"Load","updated":1689259986895,"LoadAnimation":{"duration":2,"delay":0,"once":true,"loop":false,"translateX":["-300","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}}},"children":[]},"type":"w75y8u1c","cl":"w75y8u1c pT520Me0l2J"},{"key":"eWE6wSqMGgp","content":{"children":[]},"type":"frame","actions":["eTFiGTOKRd5"],"children":["eKu4yVGv0o-","e_fVdT208ic","ewcrpsgtXPz"],"cl":"frame"},{"key":"elqVrD0leEl","content":{"children":[]},"type":"section","children":["enTSTzlq9IT","eWE6wSqMGgp"],"cl":"section"},{"key":"eg8v1CM81jZ","content":{"text":"\u003ch3 >Lack of Buyer Interest\u003c/h3>\u003cp >Another scenario that owners need to prepare for is a lack of interest from potential buyers. Although not a given, it is a scenario that frequently occurs and owners need to be prepared for the fact that there may not be a host of potential buyers immediately lining up to buy their business. A lack of buyer interest can occur for many reasons. If, for instance, your business is marketed to the wrong pool of potential buyers or marketed with a story that misses the mark, it’ll likely go unnoticed by buyers who would genuinely be interested. Buyers also require comprehensive documentation, not having a robust data room, or not having one at all, can cool interest among potential buyers. So too can pricing misalignment. Overpricing your business will likely deter buyers, while underpricing it may raise suspicions that will be hard to overcome. A serious buyer for your business will likely surface at some point, but being prepared for the possibility of a long game will result in a less stressful process.\u003c/p>\u003ch3 >Employee Retention \u003c/h3>\u003cp >Losing a key employee is never good, but losing one during a transition can negatively impact the business in myriad ways and can torpedo a sale. This is why owners need to be prepared to develop a strategy to retain highly valued employees. Buyers know that employee continuity will ensure a smoother transition for them as the new owner. They know that employees often have direct relationships with customers and that their departure can lead to uncertainty among customers and potentially cause customer attrition. They also know that these employees know the bones of the business through and through and possess tribal knowledge not contained in any manual and upon which they, as the new owners, will want to rely. And buyers know full well that employee departures during a transition will likely create nervousness, suspicion and uncertainty among other employees, and that retaining key personnel will help maintain morale and a sense of stability during a transition. So again, owners need to be prepared to develop a strategy that will keep those people.\u003c/p>\u003ch3 >Customer Retention \u003c/h3>\u003cp >Similar to retaining employees, retaining customers is very important when an owner sells. Customers aren't just folks who buy from you, they are a significant part of your business's overall value, and owners need to be prepared to have a strategy in place to assure that they stay. When a business changes hands, customers can get a little jittery. If they sense there will be some hiccups or negative changes, they might take their business elsewhere, which isn't great for the bottom line. Furthermore, customers have built trust and goodwill with the business over time, which isn’t something a smart owner will want to let slip through the cracks during the transition. The new owner can benefit from this goodwill, so keeping it intact by keeping the customers is key. Happy customers also play a vital role in maintaining a good business reputation. Satisfied customers tend to sing the praises of the business and give referrals that bring in new business, losing those customers due to the sale can ding your reputation. But having loyal customers who keep coming back and bringing in recurring revenue, makes your business a much more attractive package for potential buyers. So during the sale process (if word gets out) through the handover phase, be prepared to talk openly with customers. Reassure them that they'll still get the top-notch products or services they're used to, with no surprises. A bit of clear communication can do wonders for maintaining their trust.\u003c/p>\u003ch3 >Having a Back-up Plan\u003c/h3>\u003cp >When in the process of selling their business, there's a critical aspect that owners need to prepare for, it’s having a back-up plan. It's like having an insurance policy for those unexpected curveballs that can and will come during a sale. And trust me, in the world of selling businesses, curveballs are routine. Imagine, you're all set for the big sale, a potential buyer is on the horizon, and then, out of the blue, they decide to back out. Or, life throws a curveball like a sudden health issue that forces an owner to postpone the whole deal. These situations can be unnerving, but that's where your back-up plan comes into play. Sometimes, no matter how meticulously an owner has planned their sale, things don't always unfold as expected. That's where alternative exit strategies step in to save the day. These strategies ensure that the owner is not left hanging in the wind, wondering what to do next.\u003c/p>\u003cp >Financial preparedness is another critical aspect of the back-up plan. It's all about ensuring a financial cushion is there to absorb any unexpected blows. Think of it as a financial safety net, ready to catch the owner if the sale takes longer than originally anticipated.\u003c/p>\u003cp >This financial back-up plan isn't just about personal expenses, it's also about setting aside funds to tackle any surprise business costs that might pop up during the process. When the owner has prepared for these unanticipated but possible events by having these financial resources at their disposal, can provide peace of mind and flexibility, allowing them to weather financial storms if they arise.\u003c/p>\u003cp >And, if your business involves family members, it's wise to be prepared with a solid plan for managing family dynamics and addressing any changes in family situations. Family ties can be complex, and during a business transition, emotions can run high. Being prepared for those challenges by having a clear plan for potential conflicts or shifts in family circumstances can help maintain harmony throughout the process.\u003c/p>\u003ch3 >Emotional Preparedness\u003c/h3>\u003cp >And lastly, owners need to prepare for the emotional rollercoaster that selling their business will put them on. Owners don’t typically consider this particular element, and as result, don’t prepare themselves for the range of emotions they will definitely feel and experience. Being emotionally prepared is essential because it helps business owners navigate the inevitable challenges and changes that come with selling a business. Many business owners have a deep emotional attachment to their business, but this attachment can cloud their judgement and impact their ability for clear decision-making. Because selling a business often means relinquishing a significant part of one's identity and introduces uncertainty about the future, owners need to prepare for the emotional process of letting go and be ready to cope with feelings of anxiety, doubt, and even loss as they transition to a new chapter. Having a network of friends and family to support you, along with clear plan for what comes next after the sale can provide emotional stability and direction.\u003c/p>\u003cp >In conclusion, navigating the path to successfully selling your business is a multifaceted journey that demands thorough preparation and a strategic mindset. As business owners, it's essential to recognize that managing expectations, addressing potential buyer disinterest, retaining valuable employees and customers, having robust backup plans, and preparing emotionally are all integral components of a successful business transition.\u003c/p>\u003cp >While these challenges may seem daunting, the good news is that with proper planning and a strong team of professionals around you, they are easily quashed!\u003c/p>\u003cp >In our next article I will focus on the hidden strategies most owners aren’t aware of, but should be, when selling their business.\u003c/p>","children":[]},"type":"text","cl":"text pROFMlP3ix"},{"key":"ehuW_HEh70B","content":{"children":[]},"type":"section","children":["eg8v1CM81jZ"],"cl":"section"},{"key":"evGw-OYeFsn","content":{"text":"\u003ch4 >\u003cem >Opening Background Image Source: \u003c/em>Zheka-Boss / iStock / Getty Images Plus via Getty Images.\u003c/h4>","children":[]},"type":"text","cl":"text p9ADI1APNg"},{"key":"e5mEy6uGkuf","content":{"children":[]},"type":"section","children":["evGw-OYeFsn"],"cl":"section"},{"key":"eNmLyPlAWF0","content":{"children":[],"cont":{"tablet":{"params":{"trigger":"Load","updated":1615556112120,"LoadAnimation":{"duration":0.6,"delay":0,"once":true,"translateX":["300px","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}},"desktop":{"params":{"trigger":"Load","updated":1615556112120,"LoadAnimation":{"duration":0.6,"delay":0,"once":true,"translateX":["300px","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}},"mobile":{"params":{"trigger":"Load","updated":1615556112120,"LoadAnimation":{"duration":0.6,"delay":0,"once":true,"translateX":["300px","0"],"preset":"slideInLeft","opacity":[0,1],"easing":"easeOutQuart"}}}}},"type":"w75y8u1c","cl":"w75y8u1c"},{"key":"eyaXCv7xzOm","content":{"text":"\u003ch1 >Dane Sanders is Managing Director with Madison Street Capital, LLC in Chicago, Illinois - USA. Dane is a sell-side investment banker who helps middle-market and family-owned business owners hit the Trifecta that every owner who wants to sell their business seeks: sell to the \u003cem >\u003cstrong >right buyer\u003c/strong>\u003c/em> at the \u003cem >\u003cstrong >right time\u003c/strong>\u003c/em> and at the \u003cem >\u003cstrong >right price\u003c/strong>\u003c/em>…theirs!\u003c/h1>\u003ch1 >Dane can be reached at \u003ca target=\"_blank\" href=\"mailto:dsanders@MadisonStreetCapital.com?Subject=\">\u003cu >dsanders@MadisonStreetCapital.com\u003c/u>\u003c/a> or (312) 488-9690. \u003ca target=\"_blank\" rel=\"noopener external\" href=\"https://www.madisonstreetcapital.com/\">\u003cu >MadisonStreetCapital.com\u003c/u>\u003c/a>\u003c/h1>","children":[]},"type":"text","actions":["eNmLyPlAWF0"],"cl":"text 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