The conversation about preparing to sell a closely held business usually centers around doing a quality of earnings, building a deal team, putting together the data room. But rarely is emotional preparedness discussed, though it is something sellers can and should do.
Jon Eesley, a partner with Windsor Advisory Group, says sellers should recognize that they’ve created an incredible amount of wealth for themselves and their family, so what are they really trying to accomplish with a sale?
"What's meaningful? What creates happiness and fulfillment?" Eesley says. "I really try to poke at those questions. And to the extent that an owner has been engaged and thoughtful about those kinds of questions, then I do think they can be prepared. The problem is that's a very rare thing to do. It's, business is business. And I have financial statements, and I have spreadsheets, and this is what we do, and we're going to grow by 3 percent or 5 percent. And the idea of, wait a minute, what are we really trying to accomplish? How is this fulfilling? What might this enable me to accomplish? There aren't a lot that engage in those questions."
Quality of earnings and other deal prep actions, still, are critical to maximizing a company's value in a sale. Eesley says there could be risk hidden even in well-run businesses, so it's better to discover those issues before engaging a buyer. But sellers shouldn't skip on emotional preparedness.
"You hear the stuff that the accountants and the lawyers, etc. do. Do you hear much about what the coaches or the folks who are going to get into more of the qualitative aspects? That's a rare thing, but it should be done," he says. "And in fact, I think it's where you start. What am I trying to accomplish for myself, my family, the owners? And is a transaction and enabler to help accomplish that?"
Eesley spoke on the Smart Business Dealmakers Podcast about the personal toll an M&A sales process can take, how to emotionally prepare for an event, and where to get objective advice.