The Journey of Selling Your Business
Originally published: 04.01.19 by Brandon G. Jacob
Selling your business is a journey, involving careful planning and execution along the way from start to finish.
A friend recently asked me what I took away from my 2016 thru-hike of the Appalachian Trail (AT). For those that don’t know, the AT is a 2,189-mile continuous footpath that winds its way over the mountains from Springer Mountain, Ga. to Mt. Katadhdin in Maine.
From April 4 through September 28, 2016, I hiked the entire distance becoming what is referred to as an AT Thru-Hiker. Every year hopeful hikers show up at Springer Mountain with plansto become an AT Thru-Hiker and consistently only 25 percent of those finish the task.
When asked what I took away from my hike, my first reaction was the ability to understand what it meant to push myself. Later, as I revisited the conversation in my mind, I realized I learned a great deal more that could also be applied to a business owner who has the intention of one day selling his business.
The following are my hiking takeaways as they relate to selling a business.
Declare Your Intentions
Sounds silly at first, but if you do not make a declaration, there is a good chance you will never show up to the mountain, sell your business or do anything that takes some dedication.
The intentions will always exist, but there will always be an obstacle standing in your way preventing you from actually doing anything about it. In the case of my hike, it was notifying family members, friends and business acquaintances that I was going to be gone for six months.
As a business owner you may want to keep your declarations a bit more private, sharing only with family members, professionals and mentors, but it’s important to put something “out there” in the Universe about your goals.
Set a Time
Before you can declare your intentions, you have to set a time frame in which you plan to sell your business. This can be arbitrary (I want to sell before I am 65 years old) or it can be based on certain parameters such as growing to a certain size or value.
Regardless, before you are able to set an accurate time frame, you should assess your business and what needs to be done before the business can be sold.
Learn About the Task
When I decided to hike the AT, I had very little long-distance hiking experience. It was a new world to me, and I had to seek out information on the right gear, when to start the hike and what to expect.
For many business owners, the sale of a business is a one-time affair and there is a lot of new information to gather. Luckily, there are those who have gone ahead of you, and it is through their experiences you can learn, whether through reading or seeking out advice from former business owners or consultants.
At the end of any journey, you will look back in wonderment as to what you have learned. The idea is not to make the learning experience a costly journey, but to learn from others and capitalize on that knowledge.
Have a plan. My hiking plan was to start hiking in early April and finish by October 1. The reasoning for the timing was simple because it gets cold in Maine, and I only allotted six months for my hike and then it was back to work.
If you chose to sell your business by the time you are 65, and you are 62 today, you have three years to get your business in order and to find a buyer. A plan is required to achieve this goal. The plan will involve a valuation, identification of areas requiring attention and action items to address these areas.
Follow the Plan, but be Flexible
A plan is required, and I recommend sticking to a plan, but let’s face it, one must remain flexible. I recall meeting hikers who had planned their hike down to the day. This rigid plan does not work in long-distance hiking, and it certainly does not work in selling a business.
Do not be too rigid in terms of timing. Preparing for and selling a business is a long journey just like a hike. Along the way you may have to stop, reexamine your progress and reconsider expectations.
Forget the NaySayers
The world is full of naysayers, and they will do everything possible to derail your plans. Naysayers come in a variety of flavors, including those that have either never had or somewhere along the way lost the ability to think big, and those that have tried and failed and now want you to fail along with them.
It’s not easy selling a small business, but you can do it. If thousands of people do it every year, why can’t you be one them? When I was hiking, I ran into naysayers. These were seldom other thru-hikers who were also pursuing a dream, but tourists, townies and wanna-be hikers.
I remember a moment in the Smokey Mountains when a busload of tourists stood by a sign that read “Mt Katahdin 1,700 miles ahead”. One of the tourists asked to no one in particular, “Gee, I wonder if anyone has ever done that?”
The tourist was not being negative, but he did not have the dream. The successful sale of your business may seem like a long way up the proverbial trail, but it absolutely can be done.
Understand There Will Be Set Backs
Rain, cold, heat, bugs, rocks and seemingly endless climbs, I walked through it all. There was never a day I thought about quitting, not for a second because I went into it understanding there would be setbacks, and these setbacks would be challenging.
Having a declared intention, and a healthy dose of understanding there will be periods of doubt, will keep you on track when the sale of your business seems unlikely. It may come from a period of poor performance, the departure of key employees or even a buyer walking from an all but complete sale. Setbacks will occur and only those that are able to move ahead will reach their ultimate goal.
Walking in the pouring rain in the pitch black of night? Don’t worry; there is something great around the corner, I promise.
Hike New Hampshire when in New Hampshire
I was surprised at how many people I met along the way (see naysayers) who liked to warn me about the rigors of hiking through the White Mountains of New Hampshire. The facts are, the Whites were brutal, but there was no sense worrying about them when I was still in Tennessee or Virginia.
The actual phase of selling your business is the proverbial White Mountains of your journey. However, there is no sense worrying about this phase of the plan now if you still have work to do on your business before you can sell.
This does not mean you should go into the actual phase of selling blind, instead just focus on getting there in the right conditions today.
Track What is Relevant
If your goal is to build your business to a certain size or a certain value prior to selling, you will have to track your progress. My tracking on the AT was simple: I simply divided the number of miles I had left by the number of days left before October 1.
This provided me an indication of approximate miles per day that I needed to hike. I did this calculation daily.
Track key performance indicators (KPIs), and if you have a specific valuation in mind for your business, continually update the valuation so you always know how far you are from your goal.
Hiking the AT or selling a business is a journey, and although hiking the AT is a solo venture, behind the scenes is a significant amount of support. It is really no different from the journey of exit planning and ultimately selling a business.
I relied upon family and friends for support, and so should a business owner.
Don’t overlook the power of a mentor, consultant and someone who has sold a business before because that kind of perspective has value.
Finally, a support team that you put together must include a good tax accountant (CPA), lawyer and consultant who understands business valuations, negotiations, structuring transactions and getting your transaction to close.
The Final Climb
Your journey starts today. Every day you are making a small stride closer to the final climb when you actually sell your business. Like hiking the AT, Mt. Katahdin, Maine seemed to be incredibly far away when I started in Springer Mountain, Ga.
In fact, other than to know that is where my hike would end, I did not focus on the final climb (or even hiking through Maine for that matter) early on in my hike.
As a business owner with a multi-year exit strategy, focus on preparing your business today and less on the actual selling process. If you set your goals on selling your business for a certain amount of money with a specific list of parameters, you will be surprised to discover you can actually achieve those goals and how quickly time will pass to the point you are ready for the final climb.
As a final antidote, I recall a sign that hung in a hiking hostel somewhere in Connecticut or Massachusetts. The sign read “Today I did not make it to Maine, but I got closer.”
This quote made an impact on me not only as it related to my hike, but from a life in general standpoint. As a business owner, set a goal for your business, and every day get a little closer.