Burnout is an often-used reason for an owner selling his or her business. Potential buyers may have trouble accepting this as a valid reason for sale. However, burnout is a valid reason for selling one’s business.
A business owner can experience burnout even with a business that’s successful and growing. Many independent business owners feel they’ve worked hard, made their money, and now is a good time to cash out and move on, before burnout endangers the health of the business.
The following warning signs should remind a business owner that cashing out beats burning out:
You are overwhelmed on a daily basis.
When a business owner is a one-man show, even small tasks and minor decisions can seem bigger than Mount Everest. These owners have been shouldering the burden alone for too long, and the isolation has taken its toll.
You sense a failure of imagination.
Burnt-out owners are so close to their work that they lose perspective. Prioritizing becomes a major daily challenge, and problem solving sometimes goes no further than the application of business Band-Aids that cost money in the long run rather than increasing profits.
The joy is gone.
Although owning a business is hard work, it should also provide a good measure of enjoyment. When the work day begins with dread or boredom, the owner probably needs a change of scenery and a new challenge.
You are simply exhausted.
Being “just too tired” is a complaint heard just as often from the owner of the successful business as from the business that’s struggling to survive. In fact, a business that is growing will create increased demands of time and energy.
No matter what the status of the operation, the sheer work of keeping a business going day after day, year after year, is enough to encourage a business owner to make a change. This kind of schedule is not for everyone; in fact, statistics show that it’s hardly for anyone on a long-term basis.Read More
It is possible for a buyer and seller to have done all of their financial due diligence, to have researched the business sector thoroughly, and still end up with a deal which falls flat in the end.
This is because, as any entrepreneur worth their salt will know, business isn’t just about the numbers. Successful organisations don’t just have competent staff working within an efficient system, they also have a culture which motivates and supports both employees and regular customers. Without such a culture, even the best-run business venture will fail.
A few examples make it easy to understand the importance of culture. Just think about how a merger of IBM and Apple would have worked in the 1980s. IBM had the capital, and Apple had the innovative ideas and modernising know-how.
Despite this, it is almost impossible to consider such a merger being a success. The cultures of the two workplaces were just too different. Similarly, albeit on a smaller scale, local music venues or bars which join a larger franchise often find that their profitability falls, despite the availability of cheaper supplies and a reliable brand name.
Of course, some business owners who are looking to sell their company might not be particularly bothered about whether the deal is a good ‘fit’. If they are only receiving money in the transaction, the future success of the business might not really matter to them.
In reality, however, the person selling the business is likely to have some kind of stake in its future success. This might be because they have received equity as part of the deal, or even because they are staying on to manage it as a subsidiary of a larger purchasing group.
In addition, one should not underestimate the emotional pull of a business. Even if there is no financial benefit to the business succeeding, most former owners will want to see their old company doing well.
Even if the person doing the selling isn’t particularly concerned with the cultural fit of the new owners with their business, it is certain that existing employees will want to make sure that the deal is a ‘fit’.
A lack of willingness to listen to their concerns is never a good idea, either for the person buying or for the person selling. After all, the deal might not go through, and ignoring staff concerns could leave the current owner with serious morale issues.
Fortunately, it is easy enough to ascertain whether a cultural fit is likely. Firstly, make sure that you do your research on the entity buying the business. If it is an existing company, how do they organise themselves? Are they hierarchical or more free-form, and what sort of behaviour do they expect from their employees?
If the new owner is an individual without a track record, then just ask them directly how they intend to approach the business. If they seem dead set on changing everything about the company, you may want to suggest a transitional period during which such changes can be phased in.
Both buyer and seller will be better served by ensuring that the new culture of the business is as successful and efficient as the old!
This article was contributed by BusinessesForSale.com, the market-leading directory of business opportunities from Dynamis, the online media group also behind FranchiseSales.com and PropertySales.comRead More