Don’t sell if not ‘In Like’ with business partner

We were managing a sale and had a strong offer on the table. But as we did our research, we found out the buyer had just parted ways with another business and hadn’t left on good terms. And we learned he didn’t treat employees the way our client would want.

Even though the offer made financial sense, our client decided to pass. The buyer was upset, but at the end of the day we did him a service. Had he purchased the business, the lead employees would probably have quit, and performance would have declined.

Maybe 20% of the time our client will take less money because they like a certain buyer better. Money is a big piece of any deal, but legacy and culture issues can override a financial decision. The heart wins in the end.

Researchers found parallel brain activity between owners thinking about their business and parents thinking about their kids. In either case, similar areas of the brain lit up, including areas associated with parenting, pleasant sensations, and rewards.

Researchers say the phenomenon provides a deeper understanding of “entrepreneurial bonding.” I say it explains why selling your business can be such an emotional rollercoaster. As owners exit their business, they’re struggling with issues like these:

Letting go. Many business owners feel like their identity is wrapped up in their business. Some can’t believe the business can thrive without them. Others don’t know who they’d be without the business.

Proud Parent Syndrome™. In the same way parents can be blind to their children’s faults, they may struggle to see their company’s weakness. Some owners are unwilling to hear the business is worth less than they think it is.

Sleepless nights. As some point in every M&A negotiation, you’re going to lie awake at night wondering if you’re doing the right thing. Are you getting enough value for your business? Is the buyer a good fit?

Any parent knows what it’s like to lie awake in the middle of the night worrying. When selling, business owners can help avoid sleepless nights by working with an M&A advisor to put their business on the open market without an asking price. When you bring multiple buyers to the table in an auction-like environment, you know you’re getting the best the market can bear.

Legacy over money. When sellers have multiple options to choose from, they sometimes choose a buyer for culture fit over money. They may accept a lower price to work with a buyer who’s going to mesh with their team and keep the business local.

It’s not unlike parents who want to give their kids the best and are willing to sacrifice themselves to make that happen. At the end of the day, when selling your business, it’s never just business. It’s very, very personal.