6 things we wish we’d known before we sold our businesses

Think about the sinking feeling of regret deep in the pit of your stomach the last time you made a mistake which had a serious outcome. Hopefully this hasn’t happened too often.

Making mistakes is human nature, and the best thing we can do when we make a mistake is admit it. Thing is, when it comes to selling your business, you can’t really afford mistakes because you’re not likely to get the opportunity to sell it again – you must get it right first time.

There’s a very high chance this is a watershed moment in your life, so you need to do everything you can to make sure you get it right. Luckily help is at hand.

Brian and I each ran our own regulated financial advice firms, which we successfully sold and have the scars to show for it. That hard-won experience means we understand your hopes and fears, and can steer you towards the single most important part of any business sale:

Getting the result that’s right for you.

These tips will help you prepare to sell your business. Keep reading to learn how to do the best deal possible, and what a successful exit really feels like.

6 things we wish we’d known before we sold our businesses

1. What to do straight after deciding to sell

The hardest part of any business sale comes right at the beginning: making the decision to sell. When you’ve done that, though, there’s one thing you should prioritise above all else:

Keep going.

Once you’ve made the emotional decision to sell, you need to start taking the practical steps to see it through. Your enthusiasm for your clients and your firm starts to fade the longer you hesitate, so rip off the sticking plaster and get going.

2. How to tell employees and clients

As someone who’s spent years working hard to build a business, you know your staff and clients really matter. After all, they’re key stakeholders in your business’s success post-sale.

When the time comes to sell your business, though, there’s something you should know:

Your broker won’t give you any advice on how to break the news, because they’ve never had to do it themselves.

Start thinking about what you’ll tell clients and your team about what’s happening, and when you’ll tell them. Perhaps draft a rough script of what you want to say which focuses on their outcomes.

Give it plenty of thought, because in the long run it’ll make others feel an important part of your thought process, give you some much-needed peace of mind, and mean you won’t have to suddenly work out what you need to say.

3. Why leaving opportunities for the buyer is crucial

Selling your business is, in reality, passing the torch to a new owner. You need to give them the best possible chance to build on your success, for the legacy of your business to be upheld, and so you can secure your consideration.

Think of the baggage handlers at an airport. They might have lost your luggage, but it’ll be Tui or RyanAir or whichever company you originally booked your flight with that you’ll view unfavourably and complain to. We call this ‘reputational risk’.

Be open about the benefits, risks and rewards of your business, and work with the buyer to make this transition a success for all.

4. The different costs involved

No matter what size your business is, no sale is ever completely straightforward. But how much do you know about the hidden costs you might come across?

For example, you might need run-off professional indemnity insurance, but did you know you can only take it out with the company who already provides your cover? And if you lease a property, have you thought about the dilapidations you may need to pay on any outstanding leases?

Good tax and legal advice are key in maximising your net returns, and good advice isn’t cheap. But it’s a lot cheaper than getting it wrong.

Knowing about all of the costs you could incur in advance should be a key part of your thought process, and a good broker should tell you about them.

5. How brokers get paid

Of course you know what a broker does. But what about how they do it?

Some brokers are free, right? Wrong. A broker or introducer fee is a cost of purchase for the buyer where they’re paying, or a cost of sale for you where you’re paying. Either way, a fee is factored into the purchase price.

Some brokers have well-used tie-ups with certain buyers and will favour the ones who give them the best deal, not you. Did you know some even have different terms agreed with different buyers?

Unless you understand how your broker is being paid and what they’d receive from each buyer, how do you know they’re operating without bias? They’re legally obliged to act in the best interests of whoever their contract is with, which usually isn’t you, the seller.

If you find a broker who can be impartial and has sold their own financial advice firm, grab them with both hands. You’ll enjoy a better exit and a brighter future with them on your side.

6. The anti-climax after you’ve exited

The day you finally sell your business is one of the biggest of your life. But here’s something no-one tells you:

On that day, there’s no fanfare, no harps or trumpets heralding your achievement. It’s just another normal day, and as you sit down and ask yourself “What happens now?”, remember this:

It’s okay to not know what to do next.

The hard work isn’t over by a long way. But you can afford to take your time. And don’t worry about rushing straight into the next project, because whatever comes after can wait until tomorrow.

Conclusion

Now you’ve got the inside scoop on some of the most useful things to know before selling your business:

• The emotions you’ll go through
• Practical points like informing clients and employees
• Getting the best from your broker

There’s more to a successful sale than simply being prepared, though, and it comes straight after you’ve decided to sell.

The most important step to take is choosing the right people to broker your sale. Finding someone who’s independent and unbiased, with hands-on experience of selling a financial advice business, will make a huge difference.

If you ever want to talk about your options and learn how to do a deal that works for you, we’ll be happy to help.

Why choose us

We’ve been in your shoes. And we’ve successfully emerged from the other side. We’ll use all our knowledge, connections and experience to make sure you do too.

We’re truly independent with no equity in any buying firm, so we can help you choose the right path. Then we’ll guide you down it until you successfully reach your destination.

Contact us today to learn how we can help you sell your business.