Navigating Emotions: Passing off what you built

Join us as we discuss "Navigating Emotions" of buying or selling a business including how to prepare for the highs and lows of a business transaction and what's next.

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TRANSCRIPT:

Welcome to Integrated Insights with ICCG. For more than 30 years, our team has partnered with small business owners to prepare for and navigate the business transaction process.

Pull up a chair as we share stories and insights from our experience on all sides of the M &A table. All right, well, welcome back, Guys, I'm excited to be here.

I haven't hosted in a while. So my name is Andrew. I am your host today. I've got Dave and Grant Principles of ICCG joining us. And hey, guys,

how are you doing? Great. How are you doing, Andrew? Feeling great. And Andrew, there might be a reason you haven't hosted for a while. I don't know.

I I would say the same, so I've been actually told. I need to get better at hosting. Ah, you're good. Case in point.

Here we go. Good intro. Well, all right, so today we're going to talk about feelings, right? We're going to talk about emotions. And so we decided the three of us are the right people to talk about emotions,

right? Absolutely. Well, many intermediaries get, I think, get tunnel vision, right, in doing deals because that's our normal day to day.

And so, but for our clients, this is the most, probably the most or the biggest transaction that they will ever do. And so most,

most of them, you know, it's their first time selling your business, you know, we haven't owned their business for 30 years. They have. And we have not employed the same people or for,

you know, their people for 20 years, they have. And so the motions that come up with our clients are big and real and they feed into how the deal works.

And so Grant Dave, you guys have owned your businesses long term and then sold them. And so I'll go ahead and start asking you guys what emotions have you encountered during the process of selling your businesses?

Yeah, probably Dave, full disclosure, you know, I had a guy, I won't throw my wife under the bus, but I had somebody one time put a feelings wheel in front of me.

So I am, I don't think Dave and I are, are huge feelers, but you're exactly right. There are lots of emotions that drive decisions at the last minute.

And so it's important that we talk about it. Yeah. And just in case we get confused, I did, however, pull up a feelings for you. this is This is the guy that Grant's talking about.

Yeah, yeah, yeah. Shocked is one of the feelings, and I was shocked to find out that there must be a thousand different ways to feel every illness. That's exactly right. Other than just anxious and ticked off.

I thought those were the only two feelings. Oh, and happy every once in a while. So anyways, we have a big closing in a couple days from now, and so we're all a little stressed. And let's see, we're a little cheeky and powerful might be one right there.

So anyways, you're right, though. And the feelings are big. And one thing I think we do with our clients is we walk them through the deals that we've closed for ourselves,

you know, businesses that we've owned and sold. And it's really fun to kind of walk through and kind of help help them. And most of them go, yeah, I'm not going to deal with that. And then we kind of follow up with them afterwards. And yeah, they are dealing with that.

And it's a big, it's a big deal, you know. And so when they're typically people come and kind of excited about, hey, can I sell the business? But the more they think about what that looks like, you know,

when you say granted, it kind of turns into like a lot of intrepidation and like, oh, man, can I really do this? You know, because there's a lot see that, right? Yeah, I think,

I think, you know, principally what we do is we, and we've said this over and over, is we convert unknowns to knowns. And so whenever there's knowns, whenever there are answers,

whenever we kind of help our clients anticipate something, the stress level goes down because they already know what's coming, right? And so whenever the stress level comes down,

I would say the volatility of the emotions goes down, right? Stress kind of amplifies emotion. And so, you know, in the process of a deal,

you know, you're as a business owner, you're kind of walking on eggshells, who's going to know, who's going to find out, you know, am I negotiating this in a way that is best for the people that I,

that I love, those kinds of you know, you, you kind of go through this thing like you're separated from your employees because you're in the know,

you're doing something that they're not, you know, whereas you're on the team in the past that was all, you know, all for one, one for all. You're slammed,

you have fatigue, all those kinds of things. So in the process of the transaction, you go through a little bit of a roller coaster, that's why, you know, we like to prepare people for that,

for that journey. Yeah. And I think also, you know, afterwards, once it's closed, there's, there's a lot of relief. There's also some grieving. I mean, they're not going to probably sit around,

maybe shed a lot of tears, but especially that big check, although there's a lot that goes with, hey, I had a business owner tell me today, today, you know, let's seriously put this on the market,

but I want to make sure my people are taking care of. And that is always one of the things that comes up. So knowing that your people are taking care of can be a huge amount of relief. There can be a lot of satisfaction that, hey, you've fulfilled something for your family,

maybe financially, for the future of your family, that's really good. But I think there's also another side of this. I was thinking about this earlier today, that there's also some humility realizing that you're not the only one you can run your business.

And that's a little bit of a shock at some point. And everyone goes into it thinking there is no one else, you know. But there's some humility that comes after time when you realize that,

hey, that business is going to run just fine without me. And then you kind of sit around going, now what do I do, right? Yeah, you go visit thinking that you're going to hear about all the problems and everybody's in good shape.

It's like, wait a minute. Isn't it failing without my wisdom? You know, I think, you know, I remember one of the things we always tell our clients is that your relationships with your employees is going to change.

And they never believe us, right? And so years ago, we had the owner of the company had a very key right -hand person who actually was all of their back -hand.

you're you're not hurt by the that when it happens right yeah I had a I had a friend of mine who after he sold his business he he was really he had a hard time with with the relation relational side with his employees and he he he just said man it is it always like this that that that that employees are upset and like well not always but it probably will happen right i mean it it happens a lot right and so

you just learning how to uh to handle those emotions because it things like that are going to happen um we do talk a lot about preparing for an exit and and practical things you can do in your business that will help you and your business get ready,

build value, just prior to some sort of transition. But we rarely, well, I can't say rarely. We don't talk openly.

We may talk personally with the business owner, but we don't talk openly a lot about the emotional preparation side of things. And so what things,

if anything, can a business owner do to emotionally prepare for selling their business? Yeah, one of the first questions we ask people that come sit down at our table is,

you know, why are you selling? You know, I think the emotions are different for somebody that is just wanting to retire. You know, we always joke about,

you know, the wisdom of the guys on the 19th hole, you know, because they keep on bragging on retirement and they're bored to tears. You know,

Dave and I, when we sold our business, we always had somewhere to go. We were, we had eyes on the next thing, right? And so one of the things we counsel people is don't have your eyes on the next thing because you need to be focused on being on top of things at your company until you do sell.

But we had places to go. And so retirement is one of those places to go, but it's a new job. And so we help people understand, you know, what that means.

But I think the biggest thing that we come across is that people don't want to talk about this, people's businesses because of the long season that they've owned and run their business and built their business,

it becomes who they are. Fortunately, that's never been the case for Dave and I, but your identity, when that goes away,

and I would say men probably have a bigger problem with this than women, you know, it's who we are. We are that guy. And so when that platform of identity disappears,

a lot of men struggle with, you know, who am I? What am I really contributing? And so I would say one of the great ways to prepare ahead of time is to know where you're headed and to know what you're going to do next.

You know, Dave and I talk about, you know, there's a lot that's said about philanthropy. Like, you know, you're going to give money to, because you're loaded now,

you can give money away. But really, you have this other resource that's so important, and that is time. And so are you going to go and mentor young people,

are you going to use your time for the greater good, right? Do you have a place to go? Are you going to go start in another business or invest in another business that will yield both opportunity as well as,

you know, a place to park until your next thing. And so I just think having that discussion and being really clear helps us anticipate also how to guide our clients on anticipating what that looks like because a lot of guys they land after the sale and there's not much left in the tank.

No, it's not pretty. It's interesting, you know, when People leave a career like, military is really huge in this. My dad was Air Force, career Air Force pilot. And there was a statistic out there that when people retired from military,

because they could retire after 20, 25 years, right? So when they would retire from the military, oftentimes they would have heart attacks and just die. I mean, early, I mean, early ages. And a lot of that's because there wasn't that planning.

They didn't have anything to look forward to, I guess, maybe sat around too much or whatever. But I think that having, I think one of the points you brought up earlier, Grannes were kind of preparing for this was that having these really good friends around you who are willing to ask the good questions and the honest questions is super important,

both before and after a sale to keep you centered on what's best for you next. But to have a plan going forward is good. You know, Grant, we've always had it.

We've always known what our next thing was going to be. And now we're reaching the age where it's like, huh, you know, what is that next thing? And, you know,

it's an interesting place to be. The font of that word next becomes smaller and smaller. I think, You know,

yeah, and again, I mean, you know, we, we know that being an entrepreneur is actually a lonely occupation. It really is, you know, because you're terminally unique.

You face problems that are unique. You kind of just sit there and gather as much information as possible, and you make decisions basically almost in isolation,

if we're honest. And so this particular, when you start talking about retirement and start talking about selling your business because you want to go do something else, you don't really have a whole lot of people around you who you can have that conversation with.

And honestly, our firm is so open. In fact, we bait that conversation because we know that it helps the owner make the decision to really go through with it.

Otherwise, you get the decision. We've all faced clients that are, yes, I want to sell. No, I don't want to sell. Yes, I want to sell. No, I don't want to sell. And they go back and forth.

And because we try to mitigate that by having those conversations that we would hope that you have friends around you that can have those conversations, but most entrepreneurs do not.

Yeah, and I think, you know, that's, it's, it's kind of interesting seeing the emotions come up before and after a deal. I know we've,

we've also kind of labeled in the past that motions are a big deal killer a lot of times, right and so during a deal we've really got only a couple minutes so let's I just want to ask this one question how how can emotions positively or negatively affect a deal well first of all you mean by the time you get to the end of a deal we always talk about deal fatigue and deal fatigue is a real thing for all sides

but buyer sellers, attorneys, intermediaries, you get to the end and it's just, and what you need is just one more thing to come up and, you know,

put a hitch and everything. And it almost invariable happens. You know, we had something happened yesterday on this deal that's supposed to close this week, and it's just, you just have to deal with it at that point. It was just got to buckle down.

But the temperate start going up a little bit. And, you know, And for the seller of the business or for the buyer, for that matter, it just adds another layer of that angst and stress.

And stress will, you know, give our bodies fatigue to begin with. And it turns into anger easily for a lot of people. And there just seems like there's this never -ending list of things to do and due diligence. And,

you know, you're already, you know, emotionally separating from employees. you're kind of trying to kind of start thinking through that. What does that look like? How do you have that trend? There's just a lot that goes on.

And so I think, again, preparing yourself for that, being ready for it, and then embracing those, you know, Grant, you're going to love me for those, but really embracing those emotions as they come along and just like,

this is what they are in dealing with them and acknowledging them and then do, And then do what you can to get through it. And again, I think that's where good,

good solid counsel from attorneys and intermediaries are just really important. They ought not to be adding to the stress. They ought to be taking away some of that stress. Yeah.

To avoid you so that you don't overreact. I mean, that's really what happens towards the end of the deal. You overreact because you're just you're just full of it right you're just done yeah yeah remember that time we were we were selling that one that one of our bigger businesses we sold and and the employees kind of found out through the back door that we were selling it was yeah it was disclosed when the phone

company shows up and tries to put in a phone system before you're selling And they're going, what we were told by so -and -so, who was one of our competitors. And the employees are putting two and two together,

calling everybody. And, you know, even that, you know, you've got a choice to make, right? Do you lie or do you just own it? And, you know, but that costs a little bit of stress, I'd say. Yeah. Yeah, for sure. Well,

that's all we have time for today. Thanks to everyone listening, and we'll see on the next episode of Integrated Insights. And that wraps up another episode of Integrated Insights with ICCG.

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