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Lessons learned selling a business

Building RealTrends took 34 years. Like many of our clients who had spent many years building a profitable business, deciding to sell a business was a challenge. After all, business owners aren’t thrilled with the idea of letting go or acknowledging that their use-by date has arrived. On the other hand, being paid well for years of effort and relieved from the stress of responsibility for the entire company can be exhilarating.

For me, what took place was a dream. We were paid fairly, virtually all our employees were offered positions of equal or better circumstances than they had and our brand—which we had worked so diligently to build—was preserved. The leaders of the company that bought most of the assets of RealTrends were young, smart, accomplished and dedicated. We felt at home with them. The fit was perfect for us.

As an advisor to over 800 owners of brokerage firms through the years, I know that one of the keys to a successful transaction is to have great advisors involved. We had to negotiate the sale of our assets, set up ongoing relationships with our partner Tom Ferry and navigate numerous contractual obligations with long-term partners like The Wall Street Journal. We also had to get through normal due diligence and a quality of earnings examination. There were complications.

So, what can I share with those who may want to sell a business? 

Secure your team

Having a superb team of an experienced corporate attorney, Jim Thomas, and Alicia Vivian, who had been RealTrends’ CFO and had enormous experience in due-diligence matters, made all the difference. I was able to work with the leaders at HW Media on the material aspects of the business, and also about how our people would fit with their business. I did not have to spend much time on deal terms, financial or legal issues, or other matters.  

Therefore, the first lesson learned when you sell your business is to have a solid team of professionals next to you, bring them in on every decision and let them do their jobs without looking over their shoulders. Yes, we discussed strategy, but then I left them alone.  

It’s not always only about the money

The second lesson learned when you sell a business is that it should not be only about the money aspect of the deal. While we all want to be paid fairly for what we built, we must consider equally, if not more, the people of our companies. It’s not that we are always able to protect them from what happens in the future, but it should be seriously considered when looking at our options. I’ve found that virtually all brokerage owners care about their people, and care about how they might fare under new ownership. So, after debating numerous options for RealTrends, one of the most important factors that made the decision to be with HW Media was the obvious care that they had for their own people and ours.

Understanding the transition

Once you decide to sell your business, in most cases, there’s going to be a transition period where you will still need to be involved. Many times, there are payments that require the seller to be around, supportive of the sale and help both companies’ effect a smooth transition. A seller’s separation from the business is often not immediate and responsibilities may remain.

You must stay focused on the transition and, in every way possible, support the new owners.  For some of our clients, this has been difficult. The new owners will have their way of doing things, and it’s incumbent upon you as the seller to be supportive in all regards—even when you don’t agree with what the new owner is doing. The new owner paid you for the privilege of taking your company in a direction they choose. The honorable thing is to keep disagreements to yourself. My view is that the one thing we can agree on is that no one likes unsolicited advice.  

Plan for the future

Long before you get to the stage of a sale, you must consider what you’re going to do once it’s all done. Do not wait until then to figure it out. What are you going to do with your time? How will you replace the feeling of being needed by people in your business when you are no longer at the center of the company? Many of our clients have struggled with this mightily. 

Most leaders who find success after selling have a variety of activities and pursuits to fill the void. The key lesson is that you can’t wait until the moment of a sale to build the foundation of a new life.

Steve Murray is a senior advisor for HW Media and RealTrends.