Did you know there are two top reasons a business is sold?
- an owner receives an unsolicited offer they cannot refuse
- the business owner (or a close family member such as a partner or spouse) dies or becomes ill
While these situations can feel like opposite ends of the spectrum, they have one major thing in common – neither situation can be anticipated or planned.
Additionally, the number one regret of many sellers is that they left money on the table!
You can understand in both situations how that could happen. Personal loss often equals unimaginable grief and you or your heirs may not have the information or the mindset to do the best deal. Similarly, an acquirer often will have done their due diligence in advance of an offer and have a very specific reason they are looking at your business. If you have not considered why someone would purchase your business and understand it’s value, it puts you at a disadvantage throughout the process.
This morning I listened to Sandy Hansen-Wolff share her story on the Built to Sell podcast. Sandy was only a newlywed when her husband of only a few months, Randy Hansen, was diagnosed with leukemia. The doctors told Randy that one in four patients in his position succumbed to the disease. The couple scrambled to deal with the diagnosis and what would happen to Randy’s feed business, which was generating revenue of around $1 million, if he were to pass.
Randy died a few months later, leaving Sandy with little more than a handwritten list of his assets, including a heavily leveraged business. Worse still, Randy had recently pledged the couple’s home as collateral on a loan to pay off Randy’s former business partner.
It was a mess, but Sandy picked up the pieces, learned the business, and grew AgVenture Feed & Seed to as much as $8 million in revenue before she decided it was time for her to sell.
I appreciated Sandy’s candor and pragmatic approach to building a business that she could sell. I was also impressed with her ingenuity because she was in an industry where many companies never sold – just simply shut down when the owner was done.
This episode stands as a cautionary tale for anyone who hasn’t thought through what would happen if tragedy were to strike.
If this is something that is keeping you up at night, let’s talk. The link to get on my calendar is down below.
Have an amazing week!
P.S. If you would like to learn more about how I can help you, schedule a FREE Strategy Session with me. Click HERE to get on my calendar.