One of our brokers was recently asked to be part of a panel at a conference. The panel topic was about experiences in selling a business and in preparatory slides she saw a focus on the stress, emotion, and anxiety that came with a business sale.
Being a rather no-nonsense type herself, she thought it was too focused on the emotional side of the transaction, until a timely email from her to the buyer and seller (and the responses) reminded her this is indeed something that both buyers and sellers deal with during a transaction. Rather than run away from it, it’s important to discuss it openly.
While the two attorneys involved in this deal seemed dedicated to trading punches regarding deal points, both buyer and seller remained amiable and engaged with each other. They took the delay in closing with stride, but even the delayed date seemed optimistic. To add to the regular challenges of taking over a business, the new owners would be moving to Kansas City from out of state.
In response to our broker’s asking about how both parties were feeling, the seller noted that there were still many unknowns. But they were continuing to take one step at a time and were excited to get to the closing date. They were looking forward to introducing the buyer to their whole team.
The buyer responded similarly, noting that a great part of his peace of mind in the transaction lay in the team he had surrounded himself to shepherd this deal to closing. His accountant, his attorney (who we had introduced him to), and other mentors were making sure that all the relevant questions were being asked and we, as the broker, were ensuring that those questions got answered.
Stay Calm and Carry On
During diligence, a lot of “why” questions can come up: “Why did you spend on this?” “What possessed you to do that?”
It’s important not to get emotional or assume the worst. Realize that diligence isn’t a “necessary evil” but rather a “necessary good” (even though many days it doesn’t feel that way!)
Often, the questions answered during this period of diligence lead to long and interesting discussions about the business and operations. The overall philosophy about the company (and life) could not have come up over a perusal of income statements and tax returns. Indeed, this is going to be a significant event in your life, so you should take the time to enjoy the journey and feel all the feelings. But don’t get lost in those feelings to the detriment of the transaction. Assume the best, have a constant and diligent attitude about the questions you ask (and that are posed to you) and move towards a successful transaction.