This is by far one of the best articles I’ve read about what it’s like to sell a business. While it’s every entrepreneur’s dream to sell a business, you must be very careful. It’s not always a bed of roses. In fact, no one prepares you for the afterlife – or life after sale.
So serious is the subject and so unprepared are many entrepreneurs that I’ve seriously considered starting a consulting business to get entrepreneurs ready for such a drastic change. Most go from being over scheduled with unlimited meetings, phone calls and emails, to having no schedule at all. Suddenly it’s February, the sky is grey, the wind is blowing, it’s 16 degrees outside and you are stuck in your house in the suburbs without a single thing to do but annoy your spouse. To make matters worse, all of your friends and colleagues are working and enthusiastic about their businesses and career paths.
The author of the TechCrunch article, James Altucher, recalls the experience of selling his business in a truthful, yet painfully hysterical way. At the end of the piece, he gives some very sound advice. Perhaps the best is, “Don’t change your lifestyle for at least two years.” This is so helpful, because no one tells you how traumatic the shift can be for not only the individual, but for family and friends as well. It’s also a financial transition going from a seven-figure income to zero…for years! And while you may think you can do well just on investment income alone, it can get pretty scary when the market fluctuates or investments go bad.
In the same vein of Altucher’s advice, I’d like to add the following maxims:
- Stay true to your family and friends. They may look at you differently, want to get a loan, or worse, a handout. But at the end of the day, they were there for you before you sold, and if you treat them honestly and candidly they will be there for you again.
- Don’t get a big head. Remember a few years ago when you were happy just to pay the mortgage and meet payroll? Now that you’re post-sale and have a few dollars, everyone thinks you’re a genius. Suddenly, you are asked for your opinion on the economy, world politics and the like. Never forget where you came from.
- Find something to do. You’ll go from non-stop, 24/7 adrenaline fueled days to zero overnight. It’s tough to prepare for that. Travel is fine, but it can only take you so far. Life is better when you have a charity, another business or something to get you juiced and out of bed every morning. I joined New York Angels and it saved me. Though the group met only a few times a month, I found the meetings stimulating, the investing intellectually challenging, and the members fantastic.
- Getting all of the money you can upfront is another great piece of advice from Altucher. The 4-year workout deals look great, but you are essentially getting paid from the profits you would generate anyway. And funny things can happen along the way – like an economy that goes into the tank and suddenly the workout money which looked like a slam dunk is impossible to earn.
- Find a good lawyer and get an ironclad employment contract. Make sure they can’t reorg you out of your job. Remember the person who buys you has a vested interest in your success. But should that person leave the company, get transferred, or promoted and some new corporate type comes in, they don’t care about you very much. In this scenario, you will find yourself on the outside looking in very quickly.
So where am I today, nearly 13 years after my sale? I decided to do what I do best: run a communications agency. I put out a shingle as a one-man consultancy the day after my non-compete ended, and starting building. Fortunately, this included meeting Jason Stein and his social media agency, Laundry Service. We combined forces two years ago to offer the best of converged media – earned, owned and paid – and haven’t looked back since. We are up 30 percent this year, employing 22 people and projecting similar growth for 2014. While I don’t need to work for a living, I love what I do and I am juiced every morning. I’m one lucky son-of-a-gun.