By: Mike Bloom & Josh Bennett

Learn What Your Personal Transaction Goals Are 

Business owners often have personal goals in addition to financial goals in connection with a transaction, and it is important to define them on the front-end before beginning the sell-side process.

Personal goals to consider before beginning the sell-side process include staying involved in the operations of your business after the transaction, company legacy, familial goals, retention of any employees or management by the buyer, and more.

You need to detail exactly how you are going to spend your days after your business is sold and you are disengaged from it. After you exit your business, you will have complete control over how you spend your time.

For instance, now that you don't have to worry about the limits of vacation time, you can travel the world. You could start another business, or use your career experience to take an advisory role in an existing business.

You could take the time to write a book or memoir, or volunteer and serve your community.

You may wish to spend more time visiting with family and friends or expand on your interests and take on a new hobby, such as fishing, hiking, gardening, painting, or photography. You may prioritize your health and stay active by taking on the challenge of a new athletic pursuit. You can do whatever you want after your business is sold, including nothing.

The possibilities are limitless, but if you cannot foresee or describe your post-sale lifestyle, you may not be ready to sell your business, and you should question your sale decision. An owner that is not fully prepared to walk away from their business will waste time, energy and capital of many parties involved in the transaction.

Defining both your personal and financial goals helps you ensure you are ready to sell and prepared to walk away when it is time to commit. Your personal goals also influence the nature of the transaction process, including the types of buyers that are approached and potential transaction structures that are considered. Your personal goals should also be accounted for in your financial goals.

Learn What Your Financial Transaction Goals Are

To help you determine how much money you need to walk away from your business, first consider your current financial situation and each of the personal needs in your family that must be met.

The access to your primary source of income will be eliminated when your business is sold, so it is important to determine if the proceeds you receive from the transaction will be large enough to cover your financial obligations going forward.

Using the independent valuation you had performed of your business by your investment banker or external valuation expert, collaborate with your wealth manager, who will analyze your entire portfolio and calculate your post-sale needs.

Your wealth manager will determine whether the personal needs of you and your family will be met with the proceeds you will receive from a sale. If the proceeds received from a sale cannot sustain your desired post-sale lifestyle, you may need to defer the transaction to a later date and spend a few years increasing business value before you sell. Alternatively, you might consider reducing your financial needs in your post-sale lifestyle.

Sellers should know their “walk-away” number before approaching the marketplace.

Have you already identified your personal and financial goals? Do you think you are ready to sell your business? Take the Seller Readiness Quiz to see if you are ready to begin the sell-side process.

About Piedmont M&A Advisors

Piedmont M&A Advisors is a boutique investment banking firm specializing in buy-side and sell-side transactions for businesses with revenues between $10 million and $200 million. We also provide capital raising, valuation, and strategic advisory services.

To learn more about Piedmont M&A Advisors, or to discuss questions you might have today about selling your business, contact us today for a free consultation.