Belmont University

Seller's Remorse

When we were in the process of selling our business our attorney did a wonderful job of preparing us for much of what was ahead of us. One of the things he mentioned more than once was that we should be prepared for seller's remorse.

There are two types of seller's remorse. One kind is the emotional feelings that you are doing the wrong thing. It is not really rational, it is just that fear, insecurity, and/or uncertainty play tricks on your mind. Think Brett Favre. I would bet that rationally he knows it is time to move on from the Green Bay Packers (this is an American football metaphor for those of you outside the US). But, all he knows is football and he probably had not spent much time planning for what comes after his career in the NFL. I can empathize with him. I had a lot of the same kind of pangs of doubt when we sold our company.

The other find of remorse is one that happens because the sale puts you into a situation that is no longer fun. You are still in the company you created, but you no longer own it and now work for a boss. From the NY Times:

"The person who became my boss was the man I was negotiating with when I was selling my company," said Mr. Asterino, 46. "You're trying to maximize the value of your company when you’re selling it -- and then when the transaction closes, that individual is your boss. It was very difficult."

I knew I could not be happy with this type of exit, so planned carefully to craft an exit in which I not only monetarily exited, but physically exited, as well. Not all entrepreneurs have this option, but if you do I would strongly suggest you take it.

(Thanks to Jennie Bowman for passing along the NY Times article).


Posted by Jeff Cornwall on July 10, 2008 03:44 PM |

Comments

To use the word "remorse" is no understatement. For me parting with businesses I built from bare hands for years and years, watching them grow, nurturing them to size. Having to sell them not really to cash out but because, as an owner, you are fixed in your way, you need professional managers and owners to bring your loved businesses to the next level.

But remorse it is, all the procedures and standards, the company culture was determined by me. To sell off a business is more than remorseful. It is like cutting away part of my flesh.

After several painful experiences, normally what I do is, a year or two before the sales, I would start to wean myself away from the business, letting my assistants take over. So by then they are experienced enough to be in charge during the handover period and I can leave it to them without undergoing the painful handing over period.

Birdied by: Lim Boon Chuan | July 11, 2008 01:52 AM

I experienced the 2nd type of remorse. It wasn't fun after selling my business. But it is truly financially rewarding.

Birdied by: Mike Michalowicz (A Toilet Paper Entrepreneur) | July 11, 2008 11:10 AM

Nice article, very interesting! Just the information I needed to know, thanks!

Mark

Birdied by: Q5 Webdesign | July 11, 2008 12:06 PM

I saw the headline and thought you had written about Brett Favre.

Birdied by: Bill Hobbs | July 12, 2008 02:37 AM

I'm about a year and a half into my business. Last summer I had a project go so wrong I almost lost everything, and I realized then that I never want to part with my company. So I switched tactics... instead of branding everything with my company's identity, I'm creating products with their own separate branding. That way I can sell the product lines without having to part with my whole company.

I don't have kids, but I can't imagine the emotional impact of selling one's business is much different than when a child gets married. Who knew??

Birdied by: Paula | July 12, 2008 09:24 PM

How did you find a buyer for your business? Did you use a broker, and if so what did he charge you?

There are a ton of sites out there that purport to do it for no commission (www.biztrader.com for example), but i'm not sure if they're credible.

Birdied by: ach | July 23, 2008 03:18 PM

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