The Seven Emotions of a Business Sale

Having gone through the sale process myself, I can tell you that how Gokul describes the emotional experience is almost identical to the experience I had myself.  

In an upcoming article, I'll share my ideas of the most important aspects of getting your business ready for sale.  In the meantime, here's a preview of what you might experience once you start the process.  Enjoy the article!

-Scott

A guest post from Gokul Padmanabhan, owner of Restoration Brokers of America. 

Selling My OWN Business was Hard – and I’m an Agent!

Business mergers and acquisitions have been my strength, passion and daily profession for 13 years. I serve my clients by preparing and marketing their businesses to the best buyers. I walk them through the offer-to-close process with confidence and security. I enjoy, more than almost anything, moving a business through sale to a smooth and satisfying conclusion for the buyer and the seller. I’ve built my company and reputation on specializing in the restoration industry.

But recently, I found myself on the other side of the process—preparing to sell a business I owned outside of restoration and remediation. What I learned about the process and myself was eye-opening for me as an agent. What a game changer it was experiencing what I now call, the seven emotions of a business sale.

Emotion 1: Guilt – The Listing Process

You may think about selling for years, but it’s not real until you take those first steps. For me, I’d thought about selling for over two years before I hired an agent. Until that point, it was a dream, a window-shopping experience, a what-if. And, even when it was time to get the valuation on the business, it was still not real, just an exercise.

It became real when I signed the listing and engagement agreement. I felt like I was cheating on the employees and letting them down. With one signature, I moved from that surreal dreaming space to extreme guilt.

It helped me to keep focused on my long-term life strategy. This business was not serving me well, and the employees needed someone who was more motivated and focused on running and growing it. With that thought in mind, I was able to move through that first state of guilt.

Emotion 2: You’ve GOT to be Kidding – Buyer Questions

We listed the business, and the broker sent me confidentiality agreements.  My first call with the buyer was really interesting – I had to explain the reasons why I bought the business in the first place. It took me back to when the business was more important to me, when I was more motivated and active. I had a bit of seller’s remorse, and I could hear my inner monologue accusingly whisper, “If it’s so good, why are you selling it?”

After the first meeting, we did a showing at the office, and the questions from the buyer got detailed and very deep. They asked me why I did certain things, and I found myself getting short-tempered and snippy because I wasn’t used to answering questions from people about my practices. I told my wife, “I know I need an attitude adjustment. I know the buyer is just asking me questions in earnest and I need to calm down and really explain to him why I do certain things.”  After that attitude adjustment, it got better and progressed smoothly.

Emotion 3: Uncertainty – The Offer

The very first buyer gave us an offer. We were lucky in that respect. As much as I do this every day, when the broker called and let me know we were expecting an offer, I grew anxious. I did my best not to think about it too much during the day and lower my expectations. I assumed it wasn’t going to be a good offer, but when I received the offer, there were a lot of good points and only one or two that I did not like. I reminded myself it was never going to be perfect, and I had to put on my agent hat and give myself a talk. “Gokul, if you’ve got the most important aspects, you should consider moving forward.”

I slept on it and had a much-needed adjustment and recalibration. The offer had six of the ten most important things to me, and I decided to counter which was accepted. Despite my experience in helping others navigate the very same process, I had to continue reminding myself that, with every offer, there are always going to be aspects that don’t suit the seller’s exact wishes.

Emotion 4: Pain Like a Root Canal – Due Diligence

With the offer step complete, we went on to due diligence when we really opened up our company so the buyer could ensure he was buying what was advertised. This felt like nothing short of a root canal as I provided everything about our business from the past three years. It was a lot of work collecting financials and all of the documents the buyer requested. One of the things we did well was, instead of dragging this on for weeks and weeks, I went to the office on a Saturday and just collected everything in one day. I didn’t want to put myself through prolonged pain.

It took the buyer about three weeks to finish due diligence and get the bank financing ready. At this point it was difficult going to the office knowing this deal was progressing and becoming more certain. I had to maintain the confidentiality and keep reminding myself why I was selling the business in the first place.

Emotion 5: Where Are the Rainbows & Unicorns?? – The Closing

Going into closing, it was really interesting to be on the other side of the table as a seller. The morning of closing was exciting and nerve wracking at the same time. It was uneventful and took 20 minutes to sign papers and receive all financing and bank documents.

 Once signed, the attorney said, “Well, you’re done. Congratulations.” I was numb. I thought I’d be excited. Where were the rainbows and unicorns? Instead, my attention immediately turned to how to train the buyer for success during our transition period.  I thought I’d be over the moon and ready to celebrate, but after a quick meeting in the attorney’s office, it was just done and over. Everything signed. Congrats - that’s it.

Emotion 6: Sleepless Night – Informing the Team

I don’t think I slept a wink the night before I had to tell the employees I’d sold the business.  Lots of questions swirled in my head Would they be mad at me? Would there be a sense of betrayal? Would they feel like I let them down? I didn’t want my employees to feel like they were inadequate or the reason I sold the business. I wondered how they would take to the new owner. Would the key people stay? How could I make it the reveal and transition the most positive experience possible?

My reaction surprised me. I regularly coach my clients to make this transition to new ownership, but when it was my turn, the feeling was unexpectedly heavy. On the Monday morning following the closing, I gathered the leadership first, and it was every bit as intense as I thought it would be. I then spoke with the rest of the group and introduced them to the new owner later that afternoon. There were tears and big emotions and those who expressed they were sad to see me go.

I stepped back and let the new owner lead the conversation. What was really interesting, was when he started talking about his vision and how he wanted to grow the company, the staff was more receptive than I could have hoped. It was clear that many were open to new leadership on the team, and they were excited.

I chose a Monday to make my announcement because I wanted the employees to become used to the new owner without the weekend to overthink and let their minds go to dark places. Looking back, maybe I assigned too much importance to my role in the business. The team was able to successfully move on with the new owner. No one quit, and there were no big upsets. The new owner led the charge, and the business moved on. Much of my concern was based on the misconception that the business could not run without me.

Emotion 7: Reality & Relief – The Transition

After the closing and announcement to the staff, I jumped immediately into training the new buyer, and I went above and beyond to set up the new owner for success. The two weeks after closing were extremely busy as I supported the buyer and asked myself “What else can I teach him?”

During that time, I was still at the office early every day to see the employees and help with operations. For two weeks, it was as if nothing had changed. It wasn’t until training had completed that I woke up on a Monday morning and realized I didn’t need to go back to the office. The employees weren’t waiting for me, and my phone was oddly silent. As I sat drinking my coffee, the emotion of the journey washed over me culminating in complete relief. I looked around me and was genuinely glad I’d sold my business.

My experience with the sale of a business has been an eye opening one, and it’s helped me realize the full spectrum of emotion my clients encounter during the selling process. I’ve learned each step of the way, and what I used to believe about selling a business has been refocused to include the emotional journey my seller’s experience. Understanding the steps to selling your business is important in an agent, but my own selling experience has enriched my understanding, and I’m more excited than ever to walk along side you as you navigate the highs, lows and in-betweens of selling your restoration business.

Note from the editor:
This article originally appeared in R&R Magazine on June 28, 2021.