Businesses are like babies. They take all of your time, energy, and passion - your blood, sweat and tears. They consume your mind and your heart. They give you higher highs than you ever thought possible, and lower lows. They are your biggest source of pride, your most proud accomplishment. They are also your biggest source of anxiety and sleepless nights. But regardless, since you’ve given everything to this child, it is part of you, part of your identity.
When my twins were six-months-old, I remember showing off pictures of them and bragging to friends and colleagues about how cute MY babies were. When other friends would show me pictures of their newborns and brag about how cute their babies were, I’d think to myself, “Well, I’m glad my babies are a lot better looking than that!”
The reality is, it’s very hard to be objective when it’s MY baby, because that baby is a reflection of me and someone I love deeply. If you tried to tell me that my babies are ugly, there’s a strong possibility that I’d pop you in the nose right then and there. However, that is often exactly what happens when an owner tries to sell his or her business.
After reading all of the marketing materials, the buyer comes in, signs a letter of intent, begins to take a more comprehensive look, and finds out that this business actually has a lot of warts that didn’t make it into the sales materials. As the buyer points these out to the seller in order to negotiate down the price, the seller immediately becomes defensive, often scuttling the deal in the process.
The seller blames it on “not the right culture fit” or “the buyer was offensive”. The reality is that the seller hasn’t completed a true assessment of how attractive his or her business really is to a buyer.
When we work with clients on their exit planning process, we take them through an attractiveness survey to help them create a more realistic picture of how an outside party may view their business. This is key to being able to resist defensiveness when the buyer inevitably starts criticizing your baby.