Before You Sell, Write Down the Six Things You Are Not Going to Do

Selling is a solution. It is not a goal.

It is one of several actions that might address what is actually going on in your life, and it happens to be the most drastic, the most expensive, and the least reversible of them. An owner who starts at the solution has skipped the only step that tells them whether it is the right one.

Listen to how owners actually describe it

Not one of these sentences is “I want to sell my business.”

I cannot keep working this hard. I don’t enjoy this anymore; I am tired of the hiring and the turnover. My general manager resigned after eleven years and I do not know how to run this without her. My partner and I want completely different things now and every decision takes a month. Consolidation is reshaping my industry and I do not like where that goes for a company my size. Everything is going right, and I keep wondering whether this is as good as it gets.

Each one is specific, each belongs to a different person, and each is a problem rather than a decision. A sale might be the answer to any of them. For several of them it is not.

The seven options

Take the burnout version and treat it as a problem to be solved rather than a decision already made.

• Delegate more of the day to day
• Hand off the part you are worst at, which for most owners is people management
• Take two months off, starting soon, and find out what breaks
• Hire or promote someone to run the company while you own it
• Change the operating model so the business depends on fewer people
• Sell the division that generates most of the aggravation
• Sell the whole company

Six of those are not a sale. Several are cheaper, faster, and reversible. The fourth one solves the stated problem completely for some owners and is the thing they never seriously considered, because by the time they said the words out loud they had already decided.

Write the ones you will reject

Write all seven, including the options you are certain you do not want, because the rejected ones clarify what you actually want.

Then give each one its own page with three columns: what it gives you, what it costs you, and what it risks. Fill them in honestly, including the costs of the option you have already privately chosen.

Then leave it alone. Weeks, and for a decision this size, months. The columns will change several times and the changes are the useful part. An answer that survives a month of you poking at it is worth something. An answer you reached on a bad Tuesday is not.

Bring other people into it

You will not generate the full list alone. The person who runs your operations will think of three things you did not, and some of them will be about how the company works rather than about how you feel.

This is also where the gap between what you want and what the people around you want tends to surface, and that gap is one of the most common reasons a company ends up on the market.

Illustrative. An owner spent three years trying to hand her title-insurance agency to the daughter who ran its largest branch, and the daughter declined, politely and repeatedly. The owner concluded she had no drive and took the agency to market. What the daughter had actually worked out was that buying her mother out meant a decade of family debt negotiations; that her spouse’s work was two hundred miles away; and that her children were settled in school there. She was not unambitious. She had a different set of needs, and she was the only person in the family who had written them down.

People act on what makes sense in their own lives rather than in somebody else’s. Two people can want good things for each other, be entirely correct about their own situations, and still be unable to understand the other’s decision.

Then put it in one sentence

Once an option wins, write it down.

Reduce my hours and my stress by handing real authority, not just tasks, to the two people who have earned it.

Respond to consolidation in my industry by selling to a strategic buyer while my margins are intact and buyers are still paying for companies my size.

Get out within two years with enough after tax to fund the next company myself, so I never have to raise money for it.

The sentence matters more than it looks. It is what you measure every offer against, and in month seven, when you are tired and a buyer is pressing and the number in front of you is close enough, it is the only thing in the room that remembers what you were trying to do.

What skipping this costs

Not a bad price. The wrong transaction at a reasonable price, which is harder to see and harder to undo.

They sell a company they could have kept by hiring one person. They take a structure heavy with deferred payment because nobody asked what they needed the money for. They agree to stay three years, having never once said out loud that what they actually wanted was to stop. They sell at a moment chosen by whoever happened to call rather than at the moment their own numbers were strongest.

Every one of those is a decision made by default, and all of them cost the same thing: a sale that solved a problem the owner never named.

More on this: What Are You Doing the Monday After It Closes?.

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This is what we do. Prism Edge prices the alternatives before anyone talks to a buyer. What the company produces for you if you hire the general manager instead. What it is worth today against what it is worth after two years of preparation. What a full sale nets after tax versus a majority sale with a stake retained. That comparison is the cheapest work in the whole process and it is the only part that decides whether the rest of it was worth doing.

The full chapter on what you are actually trying to accomplish is in The Business Sale, free to download here.