Selling a business is more than just a financial transaction. It’s a major life change that affects the company’s owner, employees, and long-term stability. Many business owners focus on securing the best price but overlook the emotional and operational challenges of stepping away.
One of the biggest struggles is deciding when and how to inform employees. Some owners fear that telling their team too soon may cause panic while waiting too long can break trust.
Another challenge is choosing the right buyer. A higher offer may seem attractive, but employees and customers may suffer in the long run if the buyer doesn’t align with the company’s values.
Matt Michel and Brandon Jacob share valuable insights into this process. Matt Michel, a Speaker, Writer, and Rancher at Ranchlands of Texas LLC, has spent years helping service professionals grow and sell their businesses.
Brandon Jacob, the Principal of contractors financial opportunity LLC, specializes in mergers and acquisitions, guiding owners through complex sales and negotiations. Their expertise sheds light on what business owners should expect before, during, and after the sale.
This article will explore the emotional impact of selling a business, the role of private equity, how to choose the right broker, and the best way to handle the transition. Understanding these factors can help business owners plan and ensure a smoother, more successful exit.
Our Sponsors:
Our Affiliates:
What Challenges Come with Selling a Business?
Selling a business isn’t just about the money. It comes with emotional ups and downs, unexpected hurdles, and big adjustments. Many owners focus on getting a good deal but don’t always consider what happens next.
The Emotional Side of Selling a Business
Letting go of a business can feel like losing a part of yourself. Owners often feel relieved but also uncertain about the future. Some struggle with seeing their business change under new leadership. Others miss being in control of decisions.
Common feelings include:
- Relief – No more daily stress of payroll, operations, or financial risks.
- Loss of control – It is hard to accept that someone else is making the big decisions.
- Uncertainty – Many don’t know what to do next after selling.
- Pride – A sense of achievement from building something valuable.
The Closing Process Feels Uneventful
Many expect a big moment when the sale is final, but it rarely happens. Usually, the deal is done through a quick phone call or electronic signature. There are no celebrations, just a sudden shift in ownership.
One of the hardest parts is due diligence, where buyers dig into financial records and business details. They ask endless questions about past decisions, which can feel overwhelming and frustrating.
What Happens After Selling a Business?
Once a business is sold, the owner’s role changes. If they stay on, they must adapt to decisions made by new leadership. Many find this difficult since they built the company with their vision. Others experience relief, especially when they no longer worry about payroll and financial risks.
Selling a business isn’t just about profit. it’s about preparation, mindset, and knowing what to expect before, during, and after the sale.
How Does Private Equity Change Selling a Business?
Private equity firms buy businesses to grow and resell them for profit. Unlike individual owners, they focus on financial performance over long-term stability. They often merge companies to create a stronger, more valuable business.
However, this process can cause problems. Many private equity firms don’t have hands-on industry experience. They make decisions based on numbers, not operations. They often replace leadership, believing new management will improve efficiency.
However, running a national company is different from managing a local one. Rapid leadership and company culture changes can disrupt operations, making it harder for employees to adjust.
Should Employees Know About Selling a Business?
Deciding when to tell employees about a sale is tricky. Waiting too long can damage trust, but revealing it too soon can create panic. Employees might worry about their jobs or start looking for new ones.
- Inform key employees early – People handling finances and operations should know.
- Offer retention bonuses – Small incentives help keep essential employees on board.
- Control the message – If rumors start, employees may feel misled. A clear explanation reduces uncertainty.
Some owners fear key employees will demand more money or leave. While this can happen, being open about the transition helps reduce fear and keeps the team stable.
How to Get the Best Deal When Selling a Business
Many business owners accept the first offer without exploring other options. This can lead to undervaluing the company.
- Hire an expert – An M&A advisor, banker, or attorney can help.
- Compare offers – Some buyers want long-term growth, while others plan quick resales.
- Understand buyer intent – Knowing the buyer’s plans helps owners make informed choices.
Selling a business affects employees, culture, and long-term success. Proper planning ensures a smoother transition.
How to Pick the Right Broker When Selling a Business
Selling a business is a big step, and having the right broker makes all the difference. A good broker works to get the best deal, not just close a sale quickly. Some brokers focus only on their commission, so it’s important to choose wisely.
A strong broker should:
- Have experience in your industry.
- Understand your business and its value.
- Help you find buyers that match your goals.
It’s also smart to structure the broker’s payment to reward a better sale price. If they earn more when the business sells for a higher amount, they’ll work harder to get the best deal.
Why the Best Offer Isn’t Always About Money
The highest offer isn’t always the right one. Business owners should also consider how a buyer will treat employees, customers, and company culture. Selling to someone who doesn’t align with the business’s values can lead to problems after the sale.
A buyer who understands the industry and plans to maintain business stability is often better than one offering slightly more money but intends to make drastic changes.
Why Selling Without a Broker Can Be Risky
Some business owners try to sell without a broker, which can lead to costly mistakes. Buyers especially private equity firms come prepared with financial experts.
Selling alone often results in:
- A lower sale price.
- Confusing and stressful negotiations.
- A deal that favors the buyer, not the seller.
A good broker helps protect your interests, manage negotiations, and ensure a smooth process. Selling a business isn’t just about the price it’s about securing the best future for what you’ve built.
How Does Selling a Business Impact Long-Term Shareholders?
Selling a business doesn’t just affect the owner. It also impacts shareholders, especially if key employees hold stock options. Owners must decide how to distribute profits fairly.
For businesses set up as C corporations, retained earnings build up over time. Owners can pay dividends before selling, but this may not benefit employees with stock options. A better approach is to wait until after the sale. This way, everyone who contributed to the company’s success gets their fair share.
When the deal closes, the financial burden shifts to the new owner. The seller no longer worries about payroll or managing cash flow. Many business owners feel immediate relief, realizing how much stress they carried for years.
The Stress of Running a Business
Business owners deal with constant pressure managing employees, handling finances, and making big decisions. Over time, this stress becomes routine. Many don’t notice its weight until they step away.
One former business owner said, “I spent years worrying about payroll. Then, one day, it wasn’t my problem anymore.” That shift brings a mix of emotions relief, excitement, and sometimes uncertainty about what comes next.
Planning for Life After Selling a Business
Selling a business is a major life change. Without a plan, some owners feel lost. Their identity was tied to their work, and suddenly, they had nothing to do.
To make the transition easier:
- Have a plan – Know how you’ll spend your time.
- Stay engaged – Consulting or starting a side project can help.
- Find purpose – Hobbies, travel, or volunteering keep life fulfilling.
Selling a business isn’t just about money. A clear plan for the future makes all the difference.
Conclusion
Selling a business is a big decision that affects more than just the owner. It impacts employees, shareholders, and the company’s future. While getting the best price is important, choosing the right buyer and planning for life after the sale matter just as much.
Many owners feel relief after selling, but some struggle with what comes next. The stress of running a business fades, but a new challenge begins finding purpose beyond work. Without a plan, the sudden change can feel overwhelming.
To make the transition easier, owners should think ahead. A buyer who respects the company’s culture and employees will help stabilize the business.
A good broker will ensure a fair deal and protect the seller’s interests. A clear plan for the future whether consulting, starting a new project, or enjoying personal time helps ease the adjustment.
Selling a business isn’t just about closing a deal. It’s about making choices that create a smooth transition and a fulfilling next chapter. The more prepared an owner is, the easier the process will be.
FAQs
How long does selling a business usually take?
The process can take six months to two years, depending on the industry, market conditions, and buyer interest.
What documents are needed when selling a business?
Common documents include financial statements, tax returns, legal contracts, lease agreements, employee records, and a business valuation report.
How do you determine the right asking price when selling a business?
To set a fair price, a professional valuation considers revenue, profitability, market conditions, assets, and industry trends.
What are the biggest tax implications of selling a business?
Taxes depend on whether you sell assets or stock, your business structure, and local tax laws. Consulting a tax professional is essential.
Should I offer seller financing when selling a business?
Seller financing can attract more buyers and increase the selling price, but it carries the risk of non-payment.
Resources And People Mentioned:
Join the Service Business Mastery Facebook Group for more updates!
This Episode is Kindly Sponsored By:
- Sera (visit their website)
- UpFrog (visit their website)
- CallRail (visit their website)
- CompanyCam (visit their website) Visit CompanyCam and use code SBM for a free 2-week trial, 1:1 training and account setup, and 50% off your first two months!
- MarketStorm (visit their website)
- Lace (visit their website)
- priceguide (visit their website)
Affiliate Links:
- Castmagic (visit their website)
- StreamYard (visit their website)
- IfTTT- 10 Percent off! (visit their website)
- ZyraTalk (Visit their website)
