A few weeks ago, a landscape business owner (let’s call him Harry) contacted me to reconnect and let me know that he wanted to purchase one or more companies that would be strategic additions to his new business.  My partner Bill Arman calls these “bolt-ons.”  I thought he had sold his landscaping business, so I asked Harry to tell me the story of why he sold and how he decided to get back into the same business once his non-compete agreement from the sale expired.  I knew he was knowledgeable in both landscape and finance/business matters, and I wanted to hear what happened.  I was surprised when he explained what happened, and even more surprised to hear him say that he had regrets about the way he handled it. 

You see, he had built a very saleable company with a lot of the positive qualities that buyers are looking for.  He thought it would be a good idea to sell to his partner since he had an immediate need to cash out some of his ownership interest to pay for, among other things, a divorce.  Instead of hiring a professional advisor to help him work through the buyout with his partner, he and his partner did it themselves.  He thought he knew enough about transactions and that he knew enough about his partner to make a deal that would work out to his advantage without paying any advisors.  (Although I am sure they had appropriate legal and accounting advice.) 

Co-owners sometimes think it seems “unfriendly or untrusting” to hire someone to help them work through the issues with an ownership transfer.  I don’t know if that was the case here, but unfortunately, we are often asked to get involved once the partners or co-owners know they cannot settle their differences without a trusted third party. 

You know how we are told DO NOT make any big decisions when we are in crisis?  A divorce is one of those big stressors in a person’s life.  In fact, it ranks among the top 5 stressors along with other huge ones like the death of a spouse or losing a job.  When we are in crisis our brains regress to fight or flight instincts.  Research on decision-making shows that our brains are reactionary.  We reach for premature solutions without taking the time to evaluate more and better options.  Since we are thinking in a black and white mode, we cut through decision-making by making it binary – do this or do that.  We aren’t open to considering other options or spending a lot of time thinking about why we are doing this.  

Imagine if you are trying to work through a divorce (unfortunately, an all-too-familiar scenario).  That is not a good time to decide what to do with your company.  If you didn’t have a process and/or a trusted advisor to work with one or both owners, you could end up with a deal like he did.  The loopholes allowed his partner to avoid paying some of the purchase price so the result was a deal worth far less than the business really could have realized.  

Worse yet, imagine you are a surviving spouse who knows nothing about the business and your spouse has just died unexpectedly with no real plan for succession and/or transfer of ownership.  In some cases, there may be a plan, but it is so out of date it just causes more confusion.  I bet those owners would have regrets if they knew what happened after they had shuffled off their mortal coil. 

Then there are the business owners who have regrets because they didn’t sell in the last window of opportunity for sellers which may have brought higher prices, lower capital gains taxes or better opportunities for reinvestment of proceeds.   It is difficult to look at the period after you are no longer the driving force of the business you created, but I would say that it is more difficult to live with regrets that you didn’t have a plan to exit it at the right time in the right way.  

If you would like to discuss how you can avoid regrets in selling your business or otherwise making a transfer of ownership in the best possible way for your situation, let’s chat.  It’s rarely too early to think start your plan to avoid having regrets.  Have you bought a business and are having trouble integrating it?  We can help with that too. 

I can be reached anytime via email: alison@harvestlandscapeconsulting.com or phone at: 224-688-8838.

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Alison Hoffman

has more than 25 years of experience in strategy, operations, mergers and acquisitions and delivering business-to-business client solutions. Her areas of expertise include managing operations for profitable growth, organizational design and strategy activation. She brings a wealth of experience through her work in evaluating, valuing and purchasing over 30 companies, leading company-wide cultural and business integration projects and consolidating best practices among business processes and corresponding computing systems. Read Full Bio