We see it all the time. A business owner flip flops back and forth with regard to a proposed deal to sell his or her company. One day they are in favor of the deal, the next they are lukewarm to it.
However, oftentimes it is not the details of the transaction preventing them from agreeing to the deal. Many of these owners are perfectly content with the money offered, the legal structure and terms, as well as the buyer who will be taking control of their company. The one thing holding them back is their emotional attachment to their company.
This is perfectly understandable, particularly with small or closely held businesses. You worked hard to build your business into something worth buying. You spent years of blood, sweat, and tears to create a company you could be proud of. For many business owners, their company is like their child. Or perhaps the business was passed on from a parent or other loved one, further serving to intensify the familial attachment.
In the sale of a company, there is almost always an emotional component, whether it be emotion between the partners of a business, about the employees, or some other aspect of the company. Often, the seller does not recognize that these emotions are what are holding him or her back from selling. As a buyer, your best course of action is not to aggressively push back against emotional hesitations, but to acknowledge them and work to ensure the seller that you will handle their business with care and respect.
If you discount or disregard a seller’s emotional attachment to his or her business, you will likely have little chance of completing the transaction.
As a seller, it is important that you take some time for deep introspection before entering into an transaction. Ask yourself what exactly you want for your business and whether or not selling your company suits those needs and goals. Be honest with yourself. If you have an emotional attachment to your company that will be powerful enough to prevent you from selling, entering into the selling process rashly will result in a lot of wasted time and money.
There is nothing wrong with having an emotional attachment to your business, but it’s also important to know when to let go. If possible, it is best to remove emotion from the equation entirely and think in terms of what’s best for you and your company. Try to make your business transaction just that: business.
For more information and guidance on mergers & acquisitions, please contact the Doida Law Group today.