Interpersonal Business

Vol. LI

Dear Manager,

Selling something that has been a part of one’s life for nearly thirty years is certainly an emotional challenge. The process takes months (if not years) to bring to a conclusion. This gives one ample opportunity to pause and reflect on the decision! There are many exit doors along the way that, at times, seem very appealing. In the end, it finally comes down to the required signatures. Fortunately, this decision was clear. The signature felt good.

I believe that the decision to sell one’s business comes over a period of years. In my instance, I had clarified my desire to assume new challenges and responsibilities. There have been many rewards in developing this organization, but it is the people who have brought me the most pleasure. They have and will continue to make this company what it is. In sales, it’s always “where the rubber meets the road, and the quality of the individuals behind the wheel.”

The question in my own mind became, “If I’m feeling the wanderlust of new challenges, am I still the best manager of this organization?” How long could I maintain the level of excellence that all aspects of this agency deserved? I resolved to continue to give it my best effort until the last day and, with a tip of the hat, there would be no regrets.

THE DANCE

The early stage of selling one’s business is not unlike a mating dance. Do you want me? Do I want you? Do you want me more than I want you? How much more do you want me? If for no other reason, the interest displayed and the strategic knowledge to be obtained, were intriguing.

It was my very naive assumption that once the dance was over and the selling agreement was complete, it would be time for a good night kiss. This is not how the selling process works. It is only after the signing of the initial selling document that the specifics of the sale can begin to be ironed out.

A SAFE HARBOR

From the very early stages of conversation, one watches for mine fields in the intentions of the purchaser. Just as it was their responsibility to look into our organization with a skeptical eye, it was my responsibility to do the same. This organization would not be sold at any price without a consistent confidence that a transition would be in the best interest of all parties related to this organization.

I proceeded with a great deal of confidence in the integrity and capabilities of the buyer. In a very short time, it became clear that their resources clearly exceeded my own abilities to continue to meet the growth needs of our agency. A safe harbor had been found.

THE SECRECY

Without any question, the most difficult factor in this process was the secrecy involved. Only very few could know of the option under consideration. After all, at this point it was only an option. Nothing was final until all elements of the sale, transition, and due diligence had been reviewed, adjusted, and signed. This is a very time consuming process for both parties. I also discovered that it was indeed possible for most of the key players from both sides (myself included) to inadvertently schedule back-to-back-to-back-to-back vacations!

To the great frustration of all parties involved, it seemed as if nothing was completed within the anticipated time frame. There were many instances when the possibility of the acquisition falling through was very real. The personal pressure of the secrecy continued to build. Even those I trusted and who trusted in me could not be told, due to standard confidentiality agreements. This aspect was hell, and the most difficult and emotional part of the entire process.

THE UNKNOWN

During the weeks and months of participating in this process, I wrestled with the anxiety of not knowing if the transition would ultimately take place. Looking beyond the sale was totally prohibited. If I were to do so, my eye would be on the sale and not on the many priorities of growing a business. With one call I would discuss my agency’s future planning and programs, with the next I was negotiating a conclusion to my ownership. This is a very, very difficult emotional balance to maintain. Fortunately, I continued to enjoy many aspects of running this agency.

It was in the midst of this already intense and emotional process that one of our largest manufacturers decided to retain their own national sales force. Just what the buyer and I needed to hear! In full credit to the prospective buyer, they did not bat an eye, or suggest that any value had been lost. I knew at this point the depth of their commitment to our agency. I also learned a lot about their integrity.

I did not want this transaction and its announcement to be tainted in any way by the loss of this manufacturer. The confidence our associates showed in our agency and in me was one of the most fulfilling aspects of this process, let alone in my 28 years with the agency. My staff and I now had a mission. In the first two weeks, we mailed out over 100 inquiry letters to major manufacturers. I knew it would only take one. If you buy one hundred lottery tickets, one’s bound to be a winner!

Within weeks, I met with a manufacturer that was tailor-made to meeting the mutual needs of our two organizations. Fortunately I was able to fully replace the volume lost … exhale.

DUE DILIGENCE

It is in this phase of finalizing an agreement that the purchaser has every right and responsibility to expect the seller to “drop his trousers.” All too often, a seller will try to shade the truth, disguising what lies hidden just beneath the surface. The buyer and seller must proceed with obvious caution and an eye for detail and inconsistencies.

One of the most interesting challenges was the preparation of our financial documents. Our business had operated on a cash basis for nearly thirty years, so I found myself totally ill-prepared for a buyer who rightfully expected to review our books on an accrual basis. There was no possible way to send our bookkeeping into rewind to conform to this more complex accounting practice. This situation required additional review and re-review by all parties involved. I found myself having to learn to discuss the financial aspects of my business in a whole new (foreign!) language.

Editor’s note: Next month’s issue will review the technology aspect of this decision, the final negotiations, the importance of professional assistance, the big announcement, and a few words about my future plans.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2009. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM