Sellers remorse - selling business

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Silver Bullet
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Sellers remorse - selling business

Post by Silver Bullet » Fri Oct 05, 2018 10:14 pm

After owning our business for many years, DW and I are close to signing on the dotted line to sell our business.
It’s a significant, life changing, “won the game” transaction. Low 8 figure range.
That said, I’m getting cold feet. Business is great, profits are at an all time high and we’re building a very nice retirement fund that would essentially allow us to retire in the next few years (although not nearly the value listed above).

DW and I both work in the business and she’s very excited about retiring and stepping aside.
Me, not so much. I’ve been a serial entrepreneur my entire life. Never really had a boss and always made the final decision on all issues, when necessary. Part of this deal is that I’ll need to stick around for a couple of years. The other challenge is that I think the business will be worth considerable more in the next 3-4 years. That could set up generations, not just our retirement. Yeah, yeah, “Pigs get fat, hogs get slaughtered...” (I know!). I’m mid-50’s and my DNA won’t allow me to just retire anytime soon. I’ll need to jump into something new in a few years, but have no idea what that might be at this moment.

I’m curious to hear how you dealt with cold feet when the timeline for signing the APA was a few weeks away. I’m looking for ways to dig in my heels on final negotiating points, DW is politely telling me “it’s time...”. Thanks.

nalor511
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Re: Sellers remorse - selling business

Post by nalor511 » Fri Oct 05, 2018 10:23 pm

Just do it, happy wife, happy life.

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MP123
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Re: Sellers remorse - selling business

Post by MP123 » Fri Oct 05, 2018 10:25 pm

Hmmmm...

Mid 50s, selling businesses for eight figures, DW on board with it. Sounds pretty good! :sharebeer

Not sure about the details of the sale so maybe there's some room there for fine tuning?

ResearchMed
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Re: Sellers remorse - selling business

Post by ResearchMed » Fri Oct 05, 2018 10:38 pm

Think ahead just a few years, and think... maybe if it were 2006/2007 now.

How would you and your wife feel in a few years if either the economy has tanked or perhaps just your business environment (or something totally changes so that far fewer people/companies want/need your widgets, etc.) - and the value of your company plummets?

Just think about that, with your wife.

And okay, your DNA isn't a "sleep 'til noon, golf half a day" type.
What else do you enjoy, perhaps while you are also puttering around with another idea, but one that gives you both enough time to spend time together, be it business or pleasure or perhaps some of each?

Mostly, try to ENJOY the fruits of your success while you still have your health and each other.

RM
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AlphaLess
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Re: Sellers remorse - selling business

Post by AlphaLess » Fri Oct 05, 2018 10:41 pm

1. Congratulations to you and wife on your achievement,

2. Getting these thoughts are certainly understandable,

3. Organizational behavior / behavioral psychology pretty much states that you will overvalue your business because it is yours. There is no way around it. Part of what you are feeling is that,

4. 3-4 years, eh? If there is a major recession with stocks retreating 30%, say good bye to that sale for another 12 years. Certainly, you can squeeze another 30% out of it, maybe a bit more. But is it worth it?

5. Sticking around / working for someone for the next 1-2 years. How much of the cash-out depends on it? I only say it for two reasons: (a) you might find big differences with the new bosses, and hate it, and (b) is there an angle for you to get much less equity in the future. E.g., if you are getting buying companies stock, that may not be worth much if the buying business is not well managed.

So I think you are experiencing a combination of things:
- valuing what is your own more than others do,
- uncertainty for the next 1-2 years.

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Watty
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Re: Sellers remorse - selling business

Post by Watty » Fri Oct 05, 2018 11:04 pm

Silver Bullet wrote:
Fri Oct 05, 2018 10:14 pm
The other challenge is that I think the business will be worth considerable more in the next 3-4 years. .....

I’m mid-50’s.....
I have a much different background but when I was going through my 50's I saw a lot more people than I would have expected either die or develope major health problems. I also had one year in my 50s where I went to three funerals of people that were about my age. I was not real close with any of them but that does get you thinking.

This life expectancy calculator is VERY simplistic but it indicates there is about a 2% chance that a 55 year old man will die in the next 4 years. I would guess that there is a similar or greater risk of developing a major illness in the next four years.

https://personal.vanguard.com/us/insigh ... ol?lang=en

You can find all sorts of life expectancy calculators and statistics on the on the web but the 50's can be real hard on guys especially if you have any above average risk factors.

Likewise if something happens to your wife like a long illness that could also impact your ability to work.

A big question is what will happen to the company if something happens to you.

If you can't see your family owning the business decades from now then it may be better to sell it a bit early than to risk having to sell it in some sort of distressed sale situation.

Silver Bullet
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Re: Sellers remorse - selling business

Post by Silver Bullet » Fri Oct 05, 2018 11:26 pm

I definitely can’t control the economy, nor unforeseen health issues, no doubt about it!
Those two together might increase the risk of declining value to 20-25% (or more), which isn’t insignificant.
Maybe I just suck it up, do my non-compete time for a few years and then consider jumping back in to do it bigger/better next time. Or decide to work on my handicap!

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Sandtrap
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Re: Sellers remorse - selling business

Post by Sandtrap » Fri Oct 05, 2018 11:29 pm

I was faced with a similar situation a number of years ago.

1. Imagine . . . 2-5 years from now . . . thinking that you "should have" sold and retired earlier.

2. The business will always be worth more . . . so when do you stop?

3. It may not happen right away. But, as time goes by there comes the newer feeling replacing the old . . . I'm glad I did, my wife is glad I did.

4. There is not guarantee that the business will be worth more in the future.

j

Silver Bullet
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Re: Sellers remorse - selling business

Post by Silver Bullet » Fri Oct 05, 2018 11:34 pm

Sandtrap wrote:
Fri Oct 05, 2018 11:29 pm
I was faced with a similar situation a number of years ago.

1. Imagine . . . 2-5 years from now . . . thinking that you "should have" sold and retired earlier.

2. The business will always be worth more . . . so when do you stop?

3. It may not happen right away. But, as time goes by there comes the newer feeling replacing the old . . . I'm glad I did, my wife is glad I did.

4. There is not guarantee that the business will be worth more in the future.

j
Good advice. Spoken like a true hack! :D

JBTX
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Re: Sellers remorse - selling business

Post by JBTX » Fri Oct 05, 2018 11:34 pm

If you are thinking of doing it in another 3-4 years anyway, may as well do it now while the terms are favorable. Who knows what can happen economically in the next few years. Plus you'll need to hang around for a few years as part of the deal anyway.

Also a consideration is whether you can live on 3-4% of the 8 figures. That's at least $300k per year but I know some people who spend more than that.

123
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Re: Sellers remorse - selling business

Post by 123 » Sat Oct 06, 2018 12:52 am

What would happen to the business if something were to happen to you? Could the value of the business significantly decline if you were no longer around to add the "secret sauce" that makes it successful? How would it go if your family had to run it directly after your unexpected passing?

Provide comfort to your wife and famlly by locking in the value you have built in the business by selling it now.
The closest helping hand is at the end of your own arm.

gotester2000
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Re: Sellers remorse - selling business

Post by gotester2000 » Sat Oct 06, 2018 1:50 am

You can sell and pocket the money and start the next episode after 2 years...everybody happy.

Starfish
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Re: Sellers remorse - selling business

Post by Starfish » Sat Oct 06, 2018 2:32 am

Silver Bullet wrote:
Fri Oct 05, 2018 11:26 pm
I definitely can’t control the economy, nor unforeseen health issues, no doubt about it!
Those two together might increase the risk of declining value to 20-25% (or more), which isn’t insignificant.
Maybe I just suck it up, do my non-compete time for a few years and then consider jumping back in to do it bigger/better next time. Or decide to work on my handicap!

I can't believe you have no other interests in life than you business and your handicap.
If that's the case, it's time to discover them.

TRC
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Re: Sellers remorse - selling business

Post by TRC » Sat Oct 06, 2018 5:50 am

I'd say sell it, keep the wife happy, win the game. Then try retirement and if you're not happy, start up another venture.

We all require self-actualization.

DoTheMath
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Re: Sellers remorse - selling business

Post by DoTheMath » Sat Oct 06, 2018 6:03 am

gotester2000 wrote:
Sat Oct 06, 2018 1:50 am
You can sell and pocket the money and start the next episode after 2 years...everybody happy.
Well, to read too much into the OP's situation, it sounds like the wife would like him to not work. I know my mother was annoyed my father picked up a part-time job 6 months after retirement and would grumble every time it interfered with travel plans, etc. It took another ~10 years before my father became 100% retired.

Regardless of when the sale happens, the OP might want to have some conversations with the wife about post-sale plans. Otherwise one or the other might be quite unhappy if they don't get what they planned on.
“I am losing precious days. I am degenerating into a machine for making money. I am learning nothing in this trivial world of men. I must break away and get out into the mountains...” -- John Muir

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simplesimon
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Re: Sellers remorse - selling business

Post by simplesimon » Sat Oct 06, 2018 6:11 am

OP you need to go back and look at your very first post on this forum and read that thread again.

Silver Bullet
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Re: Sellers remorse - selling business

Post by Silver Bullet » Sat Oct 06, 2018 11:59 am

DoTheMath wrote:
Sat Oct 06, 2018 6:03 am
gotester2000 wrote:
Sat Oct 06, 2018 1:50 am
You can sell and pocket the money and start the next episode after 2 years...everybody happy.
Well, to read too much into the OP's situation, it sounds like the wife would like him to not work. I know my mother was annoyed my father picked up a part-time job 6 months after retirement and would grumble every time it interfered with travel plans, etc. It took another ~10 years before my father became 100% retired.

Regardless of when the sale happens, the OP might want to have some conversations with the wife about post-sale plans. Otherwise one or the other might be quite unhappy if they don't get what they planned on.
I've definitely got a couple of years remaining in the current gig, but DW will retire. She's actually done a pretty good job of stepping away from day to day operations by finding other things to take up her time. We've worked together for many year and both agree it's time for a break from the daily grind together. For those that are entrepreneurs, you understand that it's a 24/7 job. Business issues come home and consume dinner/evening conversations. Typical "how was your day honey" talks don't happen, because we both already know.

Bottom line, DW is happy retiring and I'm happy for her.

Silver Bullet
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Re: Sellers remorse - selling business

Post by Silver Bullet » Sat Oct 06, 2018 12:04 pm

simplesimon wrote:
Sat Oct 06, 2018 6:11 am
OP you need to go back and look at your very first post on this forum and read that thread again.
Ha! Yeah, I read that last night before posting. It's actually one of the things that sparked this post. A year later, valuations have continued to grow and DW has scaled back from the business. Good recommendations last year - and more good advice now. Thanks.

Mike Scott
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Re: Sellers remorse - selling business

Post by Mike Scott » Sat Oct 06, 2018 12:13 pm

It sounds like a good time to get out. If you still want to start another new thing in a couple of years you will have a financial cushion to work from and spouse can stay out of it.

AlphaLess
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Re: Sellers remorse - selling business

Post by AlphaLess » Sat Oct 06, 2018 12:23 pm

Silver Bullet wrote:
Tue Sep 26, 2017 5:11 pm
I agree. While not getting into the details of my business, it's heavily reliant upon products coming from overseas.
A trade embargo would cripple our nation - and selfishly - cripple me too. Economy takes a major down-turn and we'll lost 10-20% of our revenue and more of our profits. Client receivables are unsecured, so if it gets nasty like the last recession, our ability to collect from clients is limited at best.
Based on this information, which is new to me, I would say, sell sell sell.

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aspirit
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Re: Sellers remorse - selling business

Post by aspirit » Sat Oct 06, 2018 12:29 pm

Having had a hand in /owned 100% to 33.333% of a few satellite co's servicing and marketing services, labor & inventory to Mega Corp., when all was said and done, not one operation had transferable or a marketable value to sell.
Unless your "operation" has a :wink: moat, its value is suspect to me.jmho. I'd suggest you take the money and keep on keeping on.
Good luck!
Time & tides wait for no one. A man has to know his limitations.

chw
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Re: Sellers remorse - selling business

Post by chw » Sat Oct 06, 2018 12:30 pm

Went thru the same decision a few years ago in my late 50s, but on a different scale to your #'s (lower). I stepped away from a business I had built over 10 years at a mega-corp (I built a team and was incentivized on annual production). Annual income was exceptional, but DW and I felt we had a nest egg that would allow us to live life on our terms, rather than someone else's. For me it became a lifestyle decision, with an opportunity to look around the corner to design what our life could be in the retirement phase of our lives. Like you, I had some misgivings as the final weeks ticked away, but now a year later, I have no misgivings whatsoever. I guarantee if you decide to stick around a few more years for the money, you will face the same conundrum down the road.

Good luck with your decision, but don't be afraid to have the courage to seek a new path in your life.

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arcticpineapplecorp.
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Re: Sellers remorse - selling business

Post by arcticpineapplecorp. » Sat Oct 06, 2018 12:39 pm

bird in the hand as they say. Since you've won the game you don't need to start another business even though you're a serial entrepreneur. Have you thought instead about helping others who could learn from you how to run a successful business? You could volunteer your time for a non-profit like SCORE:

https://www.score.org/

Jack no longer works for money but since he retired he's offered very valuable advice to the next several generations of investors. That's priceless.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

TLB
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Re: Sellers remorse - selling business

Post by TLB » Sat Oct 06, 2018 1:15 pm

I sold my company a couple of years ago, I’m still working as CEO/President for maybe for another year. Looking back over the last 20 years being in business we had our ups and downs (mostly ups)

The Company is worth double of what I sold it for at this time, no regrets because I sold it to my employees and they will benefit in the long run.

Good luck

pizza8822
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Re: Sellers remorse - selling business

Post by pizza8822 » Sat Oct 06, 2018 2:05 pm

This is a great time to 'invert' your situation and think in reverse. Be really honest with yourself. If you had $10M in your bank account and didn't own the business, would you buy the business with the $10M in your bank account, right now? If the answer is no, you wouldn't buy it - you should sell now. Many people make irrational decisions only because it's where they currently sit. Don't be afraid of change if it is the rational decision for you.

jstntch
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Re: Sellers remorse - selling business

Post by jstntch » Sat Oct 06, 2018 2:52 pm

Congrats on the upcoming sale. I actually work in middle market (M&A $5M-$75M value businesses on average) and see this all the time; even more so towards the lower end of the valuation range. Obviously an emotional process and for most entrepreneurs the business is their identity. There is so much money chasing deals right now and sellers are getting premiums well beyond what seems "reasonable." If a private equity group (or whoever) is offering you a good value for the business, take it. Of course I have know way to predict the future but the talk around the office is that things feel overheated.

For what it's worth, firm had a client back in 2008 who was supposed to close on a transaction but got cold feet and wanted to wait until after his vacation to close on the deal. The client's wife basically forced him to sign and close. The business was heavily tied to real estate and less than a month later Lehman Brothers happened. The business ended up shutting the doors within 2 years of the sale. As most commenters have been saying, take the bird in hand. Worst case scenario you put a couple million dollars in your accounts and if you get the bug to be in business again you can buy or start another business. Also there are tons of groups out there for "retired" business owners who still want to have their hands in business whether it's mentoring, board seats, minority investors, etc.

brennok
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Re: Sellers remorse - selling business

Post by brennok » Sat Oct 06, 2018 9:40 pm

My only thoughts on this are Digg turned down 200million from Google only to sell for 500k 4 years later.

evestor
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Re: Sellers remorse - selling business

Post by evestor » Sat Oct 06, 2018 10:53 pm

I know someone who was in a similar situation, but realized they would be in the situation before they got there (IE they knew they would be remorseful, if that makes any sense).
In their situation they too would be committed for a few years after close. Plus the buyer indicated they would love for seller to keep running the business for much longer if they were willing.

They ended up keeping a small % of the business (iirc in the 5% range, but I am not close to the details so m number could be a bit off) so as to have "skin in the game" and have no plans of leaving. Seller has since given them more options on top too.

Dunno if this is helpful to you.

BusterMcTaco
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Re: Sellers remorse - selling business

Post by BusterMcTaco » Sun Oct 07, 2018 1:20 am

I am 35 and my business earns near half a million annual profit and growing fast. If someone offered me $10M for it I'd be on a beach tomorrow.

mouses
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Re: Sellers remorse - selling business

Post by mouses » Sun Oct 07, 2018 6:05 am

nalor511 wrote:
Fri Oct 05, 2018 10:23 pm
Just do it, happy wife, happy life.
Rude comment about this sexist expression.

smitcat
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Re: Sellers remorse - selling business

Post by smitcat » Sun Oct 07, 2018 6:55 am

AlphaLess wrote:
Sat Oct 06, 2018 12:23 pm
Silver Bullet wrote:
Tue Sep 26, 2017 5:11 pm
I agree. While not getting into the details of my business, it's heavily reliant upon products coming from overseas.
A trade embargo would cripple our nation - and selfishly - cripple me too. Economy takes a major down-turn and we'll lost 10-20% of our revenue and more of our profits. Client receivables are unsecured, so if it gets nasty like the last recession, our ability to collect from clients is limited at best.
Based on this information, which is new to me, I would say, sell sell sell.
Yes agreed - sell, sell, sell.

Tarkus
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Re: Sellers remorse - selling business

Post by Tarkus » Sun Oct 07, 2018 7:11 am

I was in a similar situation. I sold my 60% of my business to private equity in 2011 (age 41), and then sold the rest of it to a MegaCorp in 2016. Total valuation was low 8 figures. I worked in the business full time until last year... lower and lower responsibilities each year.

My situation was a little different because I did successfully sell at the peak -- the whole industry my business was in peaked in about 2012 and has been declining ever since. Nevertheless, the private equity guys grew the business through acquisition. That meant taking on a LOT of debt, just as the growth ended. And that meant years of "oh shit" board meetings because the declining business was always to close to blowing bank covenants, etc. To avoid massive dilution, I had to actually put over a million dollars back INTO the business at one point in 2014. It was looking like we'd have to do that again, and I had decided to instead accept dilution because my "big pile of money" I got from the sale was getting uncomfortably small.

Fortunately they private equity guys were really lucky about finding the next buyer and walking away without losing their shirts. We could not figure out WHY MegaCorp wanted our business so badly, but they were like a knight in shining armor emerging from the forest to save all the investors from certain disaster. It is true that there is a LOT of money chasing deals, so valuations for profitable mid-sized businesses are just through the roof. Even ones with a profoundly negative growth trajectory, apparently. Hopefully MegaCorp will be good to the employees -- they've been training them a lot more than we ever could, and they've got the resources to weather a big storm and turn things around.

I always thought I was a serial entrepreneur-type, but it turns out I'm having a really hard time figuring out "what's next". Life is really boring outside of the business, and I've fallen into a lengthy depression. I can't get motivated to do anything. If I had never sold, I would have needed to deal with the industry decline myself, but I would have never taken on so much debt and I think I would have been happy, even running a declining business. My old competitors (who never sold) seem to be doing just great.

Yup, I've got a big bank account now. It was probably the right thing to do for my family. But I'm bored and I haven't figured out how to get back into the game yet.

Good luck!!

BillBets
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Re: Sellers remorse - selling business

Post by BillBets » Sun Oct 07, 2018 9:27 am

Simply put...There is not a better time to sell than when your business is doing well. When things go soft, and they will, the buyers dry up and the bottom feeders feast. You can always start another business or find one that needs your insight and is willing to pay you for it if you desire another challenge.

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Earl Lemongrab
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Re: Sellers remorse - selling business

Post by Earl Lemongrab » Sun Oct 07, 2018 12:29 pm

The 10 million gets you freedom. Nobody says you have to stop working. You could try consulting for startups. You have great experience in developing a successful business. You could volunteer for a cause you believe in. Many possibilities.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

AlphaLess
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Re: Sellers remorse - selling business

Post by AlphaLess » Sun Oct 07, 2018 1:28 pm

Tarkus wrote:
Sun Oct 07, 2018 7:11 am
I was in a similar situation. I sold my 60% of my business to private equity in 2011 (age 41), and then sold the rest of it to a MegaCorp in 2016. Total valuation was low 8 figures. I worked in the business full time until last year... lower and lower responsibilities each year.

My situation was a little different because I did successfully sell at the peak -- the whole industry my business was in peaked in about 2012 and has been declining ever since. Nevertheless, the private equity guys grew the business through acquisition. That meant taking on a LOT of debt, just as the growth ended. And that meant years of "oh shit" board meetings because the declining business was always to close to blowing bank covenants, etc. To avoid massive dilution, I had to actually put over a million dollars back INTO the business at one point in 2014. It was looking like we'd have to do that again, and I had decided to instead accept dilution because my "big pile of money" I got from the sale was getting uncomfortably small.

Fortunately they private equity guys were really lucky about finding the next buyer and walking away without losing their shirts. We could not figure out WHY MegaCorp wanted our business so badly, but they were like a knight in shining armor emerging from the forest to save all the investors from certain disaster. It is true that there is a LOT of money chasing deals, so valuations for profitable mid-sized businesses are just through the roof. Even ones with a profoundly negative growth trajectory, apparently. Hopefully MegaCorp will be good to the employees -- they've been training them a lot more than we ever could, and they've got the resources to weather a big storm and turn things around.

I always thought I was a serial entrepreneur-type, but it turns out I'm having a really hard time figuring out "what's next". Life is really boring outside of the business, and I've fallen into a lengthy depression. I can't get motivated to do anything. If I had never sold, I would have needed to deal with the industry decline myself, but I would have never taken on so much debt and I think I would have been happy, even running a declining business. My old competitors (who never sold) seem to be doing just great.

Yup, I've got a big bank account now. It was probably the right thing to do for my family. But I'm bored and I haven't figured out how to get back into the game yet.

Good luck!!
An argument could be made that one should NEVER buy from an insider.
Because sale of a business is a zero sum game (short of additional, future synergies), then it is probably bad for one side or the other.
Naturally, an insider will sell just at the right time. Sure, an insider won't squeeze out 100% of the value, but in expectation, it is probably a good deal for the insider.

So, what is left for the buyer?
Possible future growth (which is 100% exogenous)?
Marrying it with another business?
Squeezing customers out by limiting competition?
Or, a bigger fool?

Silver Bullet
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Re: Sellers remorse - selling business

Post by Silver Bullet » Sun Oct 07, 2018 1:35 pm

Thanks for everyone's thoughtful opinions.
I've been on both sides of enough deals to know that we'll pull the trigger and get this one done. It would be expensive and stupid to not close this transaction. All the hard work is done (negotiating, audits, etc) and we're down to pulling together Schedules, which will probably take a couple of weeks. As long as the world doesn't come to an end in the next few weeks, it'll be a very merry Christmas and tax man will be very happy next spring. :shock:

intangiblemoney
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Re: Sellers remorse - selling business

Post by intangiblemoney » Mon Oct 08, 2018 6:51 am

I can understand your dilemma. Selling your business is like selling a piece of your life away, or sending a child off to college. Basically, you know that life will never quite be the same.

That being said, I would agree with much of the sentiment here that the timing is indeed good to sell sooner rather than later. If you wait too long then then the valuation could certainly change with the business cycle.

The last thought I have would be to be true to yourself. While selling your business for low 8 figures is certainly amazing, how much do you need to live the life you wish to live post-sale? If you only need half what you are selling it for to live a wildly awesome life, then you have more room to keep a hold of the business and risk a lower valuation.

All things being equal, a bird in the hand seems to be the most appropriate idiom at this moment for you.
Intangible assets > tangible assets

LawyersGunsAndMoney
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Re: Sellers remorse - selling business

Post by LawyersGunsAndMoney » Mon Oct 08, 2018 9:07 am

Silver Bullet wrote:
Sun Oct 07, 2018 1:35 pm
Thanks for everyone's thoughtful opinions.
I've been on both sides of enough deals to know that we'll pull the trigger and get this one done. It would be expensive and stupid to not close this transaction. All the hard work is done (negotiating, audits, etc) and we're down to pulling together Schedules, which will probably take a couple of weeks. As long as the world doesn't come to an end in the next few weeks, it'll be a very merry Christmas and tax man will be very happy next spring. :shock:
Glad to hear you came to this conclusion, and congratulations on the sale!

If you've truly got the entrepreneurial spirit - I suspect that in the next few years you'll have another idea, or will think about being a mentor (possibly investor?) to another generation of similarly minded people.

Bruce T
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Re: Sellers remorse - selling business

Post by Bruce T » Mon Oct 08, 2018 9:36 am

SilverBullet - If you have decided to sell, I think that is the right call for the reason you gave in one of your 2017 posts:
Selling the business will probably add years to her [DW] life - and that's very important to our family. (I think I'm getting to my answer talking through this!). I can always scratch the entrepreneurial itch again in the future, if it surfaces.

I have recently been through a similar sized sale to MegaCorp w/ a 2 year stay-put contract ... you might want to start another thread on the topic of "staying put" for that long, especially if there is an earn-out involved... topics that we ran into included:
1. changes in responsibility (making earn out challenging)
2. changes in accounting standards
3. changes in bookkeeping systems
4. synergy issue w/ other divisions of purchaser (pluses and minuses)
... and more....
If you start a thread or want to PM me on that topic, will share more... some of the issues are important to get addressed before the deal is inked!

Silver Bullet
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Re: Sellers remorse - selling business

Post by Silver Bullet » Mon Oct 08, 2018 11:15 am

Bruce T wrote:
Mon Oct 08, 2018 9:36 am
SilverBullet - If you have decided to sell, I think that is the right call for the reason you gave in one of your 2017 posts:
Selling the business will probably add years to her [DW] life - and that's very important to our family. (I think I'm getting to my answer talking through this!). I can always scratch the entrepreneurial itch again in the future, if it surfaces.

I have recently been through a similar sized sale to MegaCorp w/ a 2 year stay-put contract ... you might want to start another thread on the topic of "staying put" for that long, especially if there is an earn-out involved... topics that we ran into included:
1. changes in responsibility (making earn out challenging)
2. changes in accounting standards
3. changes in bookkeeping systems
4. synergy issue w/ other divisions of purchaser (pluses and minuses)
... and more....
If you start a thread or want to PM me on that topic, will share more... some of the issues are important to get addressed before the deal is inked!
Bruce,
Great advice, thanks. There are definitely some details associated with the earn-out that could affect my ability to max out the potential. Working through those now and I'll start a new thread to discuss. Some of what you've listed above is in play, as well as other issues.

Bigbuc
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Re: Sellers remorse - selling business

Post by Bigbuc » Mon Oct 08, 2018 6:59 pm

I can relate to how you feel as I sold my business of 21 years about 5 months ago. Mine was not an 8 figure sale, but a healthy enough 7 figure one that I feel comfortable going forward. Like you, I think I left a lot of potential money on the table, but I was satisfied with the sale price and moved on. A wise friend told me the best time to sell a race horse was when it was winning races. I took this to heart and decided not to gamble on future potential and sell the business when it was at the top of its game. I took a 2 year work agreement with the new owners to help with the transition. My guess is they will not need or want me there for the whole 2 years, which is ok by me.

I am looking forward to the next chapter in my life. There may be another business in me, but I am going to give the retired life a try first.

Good luck to you on your sale and your next chapter.

megabad
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Re: Sellers remorse - selling business

Post by megabad » Mon Oct 08, 2018 7:52 pm

Silver Bullet wrote:
Fri Oct 05, 2018 10:14 pm
After owning our business for many years, DW and I are close to signing on the dotted line to sell our business.
It’s a significant, life changing, “won the game” transaction. Low 8 figure range.
That said, I’m getting cold feet. Business is great, profits are at an all time high and we’re building a very nice retirement fund that would essentially allow us to retire in the next few years (although not nearly the value listed above).

DW and I both work in the business and she’s very excited about retiring and stepping aside.
Me, not so much. I’ve been a serial entrepreneur my entire life. Never really had a boss and always made the final decision on all issues, when necessary. Part of this deal is that I’ll need to stick around for a couple of years. The other challenge is that I think the business will be worth considerable more in the next 3-4 years. That could set up generations, not just our retirement. Yeah, yeah, “Pigs get fat, hogs get slaughtered...” (I know!). I’m mid-50’s and my DNA won’t allow me to just retire anytime soon. I’ll need to jump into something new in a few years, but have no idea what that might be at this moment.

I’m curious to hear how you dealt with cold feet when the timeline for signing the APA was a few weeks away. I’m looking for ways to dig in my heels on final negotiating points, DW is politely telling me “it’s time...”. Thanks.
Your last line says it all. Your business might be worth considerably more in 3-4 years but marriages are more important (and expensive if they fall apart). Someone with your personality will always find a new entrepreneurial focus so no worries. In my experience, the most common retiree pass times for someone with your spirit are:

1) Direct Charity involvement
2) Rotary, Kiwanis, etc
3) Politics (ie. city council member, school board member)

MJW
Posts: 500
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Location: Pacific Northwest

Re: Sellers remorse - selling business

Post by MJW » Mon Oct 08, 2018 8:15 pm

Silver Bullet wrote:
Fri Oct 05, 2018 10:14 pm
I’m mid-50’s and my DNA won’t allow me to just retire anytime soon. I’ll need to jump into something new in a few years, but have no idea what that might be at this moment.
Why do you need to know that right now? Who knows what opportunities might be waiting for you down the road, especially if you are well-known as a businessperson in your area. If you're that antsy for something to do, you'll find it one way or another. I would suggest removing this source of anxiety from the equation.

User avatar
TxAg
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Re: Sellers remorse - selling business

Post by TxAg » Mon Oct 08, 2018 8:31 pm

You need a hobby

Dulocracy
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Re: Sellers remorse - selling business

Post by Dulocracy » Thu Oct 11, 2018 11:05 pm

Sell! Some of the most successful business owners that I have known have built businesses to the point of selling them, cashed out, and then started new businesses to again sell.

Lock in those fabulous games that you have created with your own sweat!

One thing that you could do is to negotiate with your wife a low six-figure portion of the eight-figure settlement as seed money for your next venture. I understand the bug. I sold my first law firm for a profit and was supposed to take a break for about a year. Unfortunately, I went crazy with in a week. 2 weeks later, Law Firm number two was underway. The decision to sell a firm one was nonetheless the correct decision. You need to differentiate between whether or not it is the right decision to sell this business while it is hot in the market is hot and your desire to continue to be an entrepreneur. Take this opportunity to guarantee your future and your wife's future. Then take a very small part of that and try to secure the future of future Generations. As they say on the airplane, first secure your air mask before securing The Masks of your loved ones. As others have pointed out, how rocky would your marriage be if something disastrous happen with the business and you did not sell when your wife thought that it was the right moment?

If you are afraid of starting over from scratch because it is too difficult, find some young eager person who wants a mentor to work with them in creating a new company. No one said that you have to go It Alone if that is the concern.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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