The 7 Deadly Sins Killing Your Business Exit
December 18, 2017 in Exit Strategies
At the risk of getting biblical, I’m going to break down the seven reasons the deal blows up when business owners go to market to sell, attempt to dissolve a partnership, or navigate complex family transitions. Yes, we’re tying each reason to the oh-so-familiar seven deadly sins compiled by the church over 1,400 years ago.
Despite the ancient origins, I see these seven markers kill deal after deal. Even when they don’t administer the final blow, they throw a giant wrench in the process and threaten the overall success.
Now, you might be anticipating that I’m going to place blame on both parties. It’s true that deals blow up because buyers get cold feet or they present unreasonable offers or terms. That’s not what we’ve covering. Today we’re digging in deep to the characteristics of the seller or business leader that give a deal a one-way ticket to nowhere.
So sit back, strap in, and attempt to get comfortable. This isn’t going to be pretty.
More, more, more.
Doesn’t matter if it’s money, power, or control, whatever “it” is, “it” will never be enough. Sometimes it’s an overinflated opinion of the worth of the business. Other times it’s a lack of contentment. Don’t forget about excessiveness.
Regardless of which term you use, nothing is ever “good enough.” We could bring all the money in the world or the most favorable terms, yet this deal won’t go through.
Despite what you might be thinking, in the context of your business exit, this one has nothing to do with sex. Here we encounter a lust for more power, more money, or more control. It’s that strong desire obscuring all the facts of the deal.
With a power trip in the driver’s seat, the only place that vehicle is going is to the junkyard.
Greed is about as straightforward as any of the seven sins gets. This trait blinds individuals to all-over aspects of the deal, including fairness or market value. While greed could encompass a few different aspects of the deal, really it boils down to the demand for more money.
Insert ego into the equation. Just as greed blinds, so does pride. Here the ego distorts the situation. From reacting to how a lawyer spoke to you to not wanting to do business with someone because they were a jerk, an overinflated sense of self quickly derails a negotiation progression.
While I don’t recommend selling to a buyer you don’t trust, having a negative gut reaction to how they operate is a far cry from feeling offended at the proceedings or by some of the providers.
Pride also has other presentations. Sometimes it not willing to take your name off the building or having your self-worth too closely tied to the business itself. In those instances, we’ve seen pride lead to a self-induced sabotage of the deal.
The more formally named sin, tristitia, equates to sorrow, despair, and despondency. I imagine I’m getting a few raised eyebrows trying to connect the dots.
In short, this one comes down to fear. Fear of what’s next. It’s the uncertainty of how to move forward without the business. How do you go on without the regular companion of the entrepreneurial spirit and the hustle driving you out of bed every morning? That apprehension builds into an early stage seller’s remorse, and drives the seller away from the bargaining table.
While the other traits can show up in almost any business exit, wrath is typically reserved for ugly partnership breakups or grisly family transitions. Here, the mantra is, “Business be damned. I’m going to do everything in my power to take ‘them’ down.” It’s the ultimate lose-lose scenario.
“Them” could be a sibling, a parent, or a business partner. In short, it’s a business owned by multiple individuals where one or more feel slighted and want to go out with a vengeance.
It takes work to exit your business. No matter how you slice it, unless you’re just closing up shop, preparing for an inside sale or getting the business ready for market takes energy. Owners too lazy to go the last mile might as well just close their doors. The irony is that closing up shop isn’t exactly a cakewalk either.
Most often it’s not laziness we encounter. Too often it’s being burnt out. At some point, business owner will hit that wall. It’s where you’re ready to throw in the towel that moment and don’t have the stamina to cross the final exiting hurdles.
Especially when looking to land an energized buyer by going to market, the business owner needs to save one last push to help spark enthusiasm and convince a potential buyer that this business is something they really want to invest in and run. A downtrodden, burnt-out sales rep isn’t going to inspire confidence.
Avoiding the Deadly Sins
Now if we were in a biblical setting, the follow-up would talk all about the seven virtues. We’re not. At Exit Consulting Group, we’re here to help you successfully exit your business and move onto the next phase of life.
That’s why we wanted to clearly point out each of the seven deal killers.
One of the most advantageous avenues is to start planning out an exit strategy early in the game. This means addressing those hard questions and challenging truths several years prior to the need to exit.
By partnering with us early in the process, we can help set clear expectations, drive value, and build a roadmap that sidelines any of these vices. More importantly, we can chart a course to a profitable and fulfilling exit that takes your personal and business goals into consideration. In the long run, that’s the ultimate goal.
Stop any of these deal killers from tarnishing your exit. Give us a call today.