Many business owners struggle with exiting their business as it may feel like putting one’s child up for adoption. Research supports this: Entrepreneurs really do think of their business as a child.
Research findings include similar brain activity between owners thinking about their business and parents thinking about their children. In both cases, similar areas of the brain lit up, especially those areas associated with parenting, pleasant sensations, and rewards.
Researchers say this phenomenon provides a deeper understanding of “entrepreneurial bonding.” We say it explains why selling your business may be an emotional rollercoaster. As owners exit their business, they may struggle with these types of issues:
Letting Go. Many business owners’ self identity is tied to their business. Some can’t believe the business can thrive without them while others don’t know who they’d be without their business.
Proud Parent Syndrome™. In the same way parents can be blind to their children’s faults, busines owners may struggle to see their company’s weakness. Some owners are unwilling to hear the business is worth less than they think it is…or do the necessary work to increase the value of the business to their expectations.
Sleepless Nights. There is a point in every M&A negotiation, that you’re going to lie awake at night wondering if you’re doing the right thing. Am I getting enough money for my business {to retire, travel, move, etc.}? Is the buyer a good fit? Will my employees be taken care of? Will my employees stay? Every parent knows what it’s like to lie awake in the middle of the night worrying. When selling, business owners can help minimize or even avoid sleepless nights by working with an M&A advisor to put their business on the market.
Legacy Over Money. When sellers have multiple options to choose from or understand what they really want, sometimes they will select a buyer for cultural fit more than the Purchase Price. A lower price may be accepted for the right buyer, for example, one who meshes with the team and/or keeps the business local.
Entrepreneurs are not unlike parents who want to give their children the best and are willing to sacrifice themselves to make that happen. At the end of the day, when selling your business, it’s never just business. It’s very, very personal.
