Full disclosure: This post is not for everyone. There are a lot of great reasons to build a business of your own, including providing much-needed jobs, giving back to your community, building a legacy for your kids to inherit or making a difference in some other way. But if these are your business goals, move on to read something else; this post will only frustrate you. If you see your business as an extension of your personality or a creative expression, keep creating and stop reading.
If, however, you are Machiavellian in your attitudes and see business as a way to generate money so you can have the freedom to do other things with your time, this post is for you. Think of it as a cheat sheet of sorts -- the four ugly truths you need to know about selling your business that you won't learn at Harvard, or any other MBA program.
1. For every one person paid to think, you need 10 who do as they are told
It's fashionable on campuses and boardrooms to talk about creating a "happy" culture by giving employees lots of autonomy. The truth is, if you want to sell your business, you need to become as predictable as a Swiss watch -- which means you don't want employees running around willy-nilly indulging themselves in every new idea they conceive of. For every person in your company paid mostly to think, you need 10 employees who are paid to simply execute.
2. Your business is a thing, not an extension of your personality
Building a business to sell it requires that you treat your business like a thing. Your business shouldn't be a proxy for your personality, social life or family. It's an object to be molded, manipulated, and coldly sold like a stock when you think it has reached its maximum value or when you have something better to do with the money. If you don't think you can separate your identity from your business, plan to be carried out boots first.
3. If it feels more like a courtship than a street fight, you're giving up too much
When negotiating the sale of your company, prospective buyers will play a game to buy your business for as little as they can. That's their job. As much as they claim to be your friend, promise to help you hit your earn-out, buy you fancy lunches and lather you up with praise, their job is to negotiate with you to the absolute lowest number they can buy you for, which means somewhere in the negotiation, you will need to give them an ultimatum beyond which you are not willing to go. If it doesn't start to feel more like a street fight than a romance, you're giving up too much.
4. Employees will get jealous
No matter how you sugarcoat the sale of your business, how great the acquirer is or how much of the sale proceeds you share with your team, you will have some people who get jealous. That's life. There is nothing you can do other than to remind yourself that you earned every penny. They weren't there when you completed all of the government's start-up paperwork from your home. They weren't the ones who made the first sale, collected the first receivable, negotiated the first lease, got hung up on and groveled for business to anyone who would listen. Your employees came later, when things were safer and more stable. There's a price to be paid for safety, as any investor knows. You deserve to be richly rewarded for selling your company. You took the risk; you deserve the lion's share of the reward.
I warned you in the beginning this post wouldn't be pretty and may run counter to the fashionable idea of building a happy culture and making a difference through your business. So, what's on your mind right now?
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John Warrillow is the author of Built to Sell: Turn Your Business into One You Can Sell. He has started and exited four companies and was named one of America's most influential marketers by BtoB Magazine in 2008. Think you can sell your business? Take the Sellability Index Quiz. Follow him on Twitter @JohnWarrillow Become a fan on Facebook