I’m sure I had a goofy smile on my face. After all, I’d just sold my small business. I was sitting in my car, holding the check in my hand, remembering again why I’ve come to love the back end of a small business story.
While I enjoy being a small business owner, I have found that there is an almost magical moment that occurs just after the sale of a business. A moment I’ve come to desire so much I keep looking for ways to repeat it.
In this case, the end came after a 5-year journey.
The Start of the Story
I’d been looking for a small business to buy for a while. It had been a couple years since the sale of my first two businesses, and I was ready to be an owner again.
After reviewing hundreds of listings online, and dozens in person, I finally made an offer on a business I thought could be a good fit. That offer fell through almost immediately when I discovered that the former owner had fabricated a good portion of the financial information he’d provided. He had simply made up the numbers he gave me, so I knew I couldn't trust him, and I had to find another way forward.
After searching to find what options I had available, I made another offer on the same business contingent on being able to look at all the original financial records. I wasn’t willing to take the owner’s word for anything, so I required authorization to get documentation directly from the bank. Long story, short, that deal also fell through when it became clear that even the bank records couldn’t be trusted. I discovered the owner had been depositing personal checks in the business account and recording it as revenue. Crazy right?
No path forward. I thought it was over.
But six months later, the owner lost that business to his bank, and four months after that I bought the business directly from the bank for a fraction of my original offer. After more than a year of research, rejection and multiple offers we finally owned the business.
The Middle of the Story
It quickly became clear that the previous owner’s cash-flow troubles had resulted in some widespread, negative impact on the business. There were numerous maintenance issues that had been neglected, and staff and vendors were understandably distrusting of ownership. The financials were a nightmare, and the customers were skeptical. There was a lot of work to do.
The team and I worked hard to rebuild the business. From operations to marketing, from financials to a new roof, we looked to find the best way to fix, change and promote the business.
Not everything we tried worked, but enough did, and we were able to substantially change the financial trajectory of the business. Things were going in the right direction.
The End of the Story
The details on how the sale came about will be shared separately, but the short version is that an unexpected offer accelerated our exit from this business by about 18 months, and we closed the transaction in December of 2017.
So, 3 ½ years after the purchase, I found myself sitting in the car holding a check in my hands for 125% more than what we paid for the business.
We’d more than doubled our money in that time.
I was at the rear end of this small business story.
The Good Parts
I’ve been lucky enough to own several small businesses over the years, and even luckier to make successful exits from a few of them. I’ve come to realize that the joy I felt sitting in my car wasn’t about the money (O.K., it was partly about the money), but it was more about three other things.
Thing #1: A job well done
I love being a small business owner. I love figuring out the challenges, solving problems, and building on opportunities. I love the whole game, but I’ve learned there is a special joy in the end of it.
If you’ve never sold a business before you’ve probably tasted the feeling I’m talking about when you...
- Finally make the sale to the client you’ve been pursuing for a while.
- Put a particularly good year “in the books” for your business.
In those situations you get that feeling of satisfaction from a job well done. Where your feet naturally go up on your desk, your hands go behind your head and a smile forms on your face. For a moment, you know you "did good".
But when you do it as the ongoing owner you must enjoy the victory quickly, with the understanding that you’re going to face challenges (in many cases the exact same challenges) the next day, and the next, and the next.
When you sell it's different.
Thing #2: A job I don’t have to do any more
That’s the special part of the sale of a business for me. The sale means I get the sweetness of “a job well done” but also the closure of “a job I don’t have to do anymore.” I get to close the book and put it on the shelf.
It’s a clear end. It ends the stress, the engagement and the omnipresent pressure that I feel when I’m “the owner.”
I love that feeling of "end", but mostly because it's tied to a new beginning.
Thing 3: What’s next?
I talk with a lot of small business owners that fear the “what’s next” part when they think about selling their business. For some the fear of “what’s next” is so great that they avoid considering a sale at all.
I understand that fear, especially when life has been so defined by the work you’ve done. The first business I sold was one I’d built from scratch over 15 years. It consumed a huge amount of energy and time when I owned it, and then one day it was just gone. I was scared before the sale, but after is when I felt the unique joy that only comes with a good end.
It’s natural to be afraid if you’re a small business owner who’s thinking about selling your business. But after taking the step a few times now, I can tell you that a successful end can be a truly wonderful thing.
You get to start over. But you get to start over with all the knowledge, skills and connections that you’ve built over the years building the business you just sold (not to mention the capital from the sale).
It’s a very exciting place to be. Full of freedom, satisfaction and opportunity -- and that’s why I keep working to get back there.
When one story ends, the next one can begin. Is it time for the end of one of your stories?
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