Selling your business: what the figures cannot decide
Selling the business you have spent your life on means taking two decisions under one name: a transaction, whose value, tax consequences and contract your advisers examine first, and a farewell, which no figure can decide for you. Hesitating over a good offer is common and, on its own, says neither yes nor no; it usually means the second decision has not yet been thought through. Before you sign, you should be able to say in writing why you are selling, why now, what you are not prepared to lose and what you will do the day after. A private conversation may make sense alongside your advisers, once the figures are on the table and what remains open is the decision itself.
In brief
- Selling is both a transaction, which your advisers examine first, and a personal separation that nobody can calculate for you.
- Hesitation over a good offer is common; what matters is what it is about: the terms, the timing or you.
- An offer can arrive at the wrong moment without being the wrong offer, and the buyer’s timetable need not be yours.
- Family and staff carry different weight: some decide with you, some have an opinion, and others depend on what you decide.
- Some questions only you can answer, ideally in writing and before you sign, even if you end up not selling.
In this article
- Two decisions under one name
- Is it normal to hesitate over a good offer?
- When the offer comes at the wrong time
- What will you do the day after the sale?
- A family with opinions, and rarely just one
- When should you tell your employees?
- What should your advisers look at first?
- Questions only you can answer
- Not selling is a decision too
- Frequently asked questions
Two decisions under one name
When people talk about selling a business, almost everything revolves around the transaction: what it is worth, who is buying, how the price is paid, what tax falls due, what gets signed. That keeps advisers busy for months, and rightly so: this is where figures are settled that will shape a family’s future.
The other decision barely has a name. It is parting with something you built, or inherited and carried for decades: a place where you have spent more hours than at home, people you know by their first names, a role through which others see you and you see yourself. It appears in no valuation report, and no adviser has it in their brief.
The two become entangled without anyone noticing. An objection to the price can, underneath, be an objection to leaving; a sudden eagerness to sign can be, above all, weariness. Until they are separated, every meeting with the buyer or your advisers carries a weight that does not belong there.
The starting points vary a great deal. The founder nearing retirement who has known for years that none of the children wants to carry on. The second generation, running a company inherited rather than chosen. The owner of a mid-sized firm, worn down by a few hard years, who receives a generous approach from a competitor or a private equity house. In all three cases the transaction can be impeccably prepared and the decision still not taken.
Is it normal to hesitate over a good offer?
It is common, and it often feels like a contradiction. For years you said you would sell if a good offer came along; the offer has come, and something stops you from answering. Hesitation does not tell you whether to accept or refuse. It tells you that something has not yet been looked at, and the first task is to find out what it concerns.
Some doubts are about the deal itself: part of the price paid later and dependent on future results, a period in which you would stay on to run the company under the buyer’s authority, a non-compete clause that keeps you for years from doing what you do best, liabilities as seller whose reach you do not fully understand. These doubts are legitimate, and they belong with your lawyer and your tax adviser. Many fade as soon as someone explains the clause in plain words; others are confirmed, and then they are negotiated.
Some doubts are about timing, which the next section takes up. And some are about you: who you will be when you no longer run things, what people will say, what remains of a lifetime’s effort once it has become a bank balance. These last doubts like to dress up as the first kind. It is easier to say “the price is too low” than “I don’t know who I’ll be afterwards”.
A simple test helps tell them apart. Imagine the offer were clearly improved tomorrow, with nothing else changed. If you would then sign without a second thought, your doubt was about price, and that is work for your advisers. If you still could not sign, the doubt is of another kind, and no improvement will clear it.
There is also the opposite: the urge to sign too quickly, because accumulated fatigue or a poor trading year makes any offer look like an emergency exit. That haste deserves as much attention as reluctance. A decision taken mainly to make something stop rarely matches the one you would take with a clear head.
When the offer comes at the wrong time
Many offers are unsolicited. A competitor, a larger group or an investment fund gets in touch when you are not thinking of selling at all, or only of doing so “one day”. From then on a clock is running that you did not set: a date for your answer, a period of exclusivity, a letter of intent someone wants signed before the end of the month.
The wrong time takes many forms. A record year, in which you were enjoying running the company for the first time in years. A bad year, in which any offer looks like a lifeline. A change in the family, a separation, the loss of someone close. A medical warning, which is first a matter for your doctor.
It helps to separate two questions that timing tends to blur: whether the offer is good and whether the moment is good. Your advisers examine the first question with figures. Only you can answer the second, perhaps put like this: if the same offer came in a few years’ time, would I consider it seriously?
As for deadlines, ask your lawyer and your adviser which are binding and which are negotiable. The buyer’s timetable follows its own reasons, which are legitimate and need not coincide with yours. Of the three questions we suggest asking before any important decision, one is especially useful here: who benefits from my deciding quickly?
If you feel you must answer at once, stop and look at that feeling. Urgency that comes neither from a legal deadline nor from a signed document usually means the decision has not yet been made; we explain why in our note Haste is a signal.
What will you do the day after the sale?
It is the question most often put off and the one that weighs most afterwards. For decades your week has had a shape: the first call of the morning, the Monday meeting, the walk round the workshop or the warehouse, the office that was yours. The business did not only fill your time. It gave you a place.
That place exists outside as well. In many towns the owner is “the one from the brewery”, “the woman who runs the printworks”, “the man from the car dealership”, and is greeted, consulted and invited on that account. Selling does not take your name away, but it changes what it means, and hardly anyone sees that coming.
People who sell tend to picture life afterwards as free time: travel, the grandchildren, a project postponed for years. That is a plan for a few months. What follows is less visible: the telephone rings less often, decisions are no longer run past you, and everything carries on without you. Some find that a relief, others find it disorienting, and almost nobody knows in advance which group they will belong to.
Many deals also include a handover period in which the seller stays on, now as a manager working for the buyer. On paper it provides continuity. In practice it means watching decisions being taken in your own house that you would not take, without being able to change them. Its length and terms are drafted by your lawyer; whether you can live with it is a question to ask yourself before you sign.
A concrete exercise helps: describe in writing an ordinary Tuesday, six months after completion. When you get up, whom you talk to, what you do with everything you know. If the description comes easily and you like what you read, you have learnt something about that part of the decision. If you cannot write it, or what you write unsettles you, you have found something that deserves attention before the price.
A family with opinions, and rarely just one
When the business is a family firm, or simply carries the family name, selling it is not the owner’s private affair. Each member of the family has a different relationship with it and therefore a different view on selling, even if they do not always voice it.
Your spouse may have been waiting years for you to step back, or may dread that step more than anyone, especially if they work in the business too. A son or daughter who hoped to take over may experience the sale as a verdict on themselves; another, who never wanted to join, may feel relief and guilt at once. Among siblings or cousins who hold shares, some want the money and others want to keep the company. And sometimes a loyalty weighs on you: your own loyalty to the founder who, as the family likes to say, would never have sold.
Three things get mixed up around the family table and are worth keeping apart. Who has a vote, because they are a shareholder, what the articles or the shareholders’ agreement say about selling shares, and whether your matrimonial property regime requires your spouse’s consent: that is for your lawyer. Who has a legitimate interest, because the sale changes what they will one day inherit or the life they will lead at your side: how the transaction affects your estate is for your estate lawyer or notary and your tax adviser. And who simply has an opinion. All three deserve respect, but they do not carry the same weight.
One voice is often missing from that conversation: yours. Someone who has run a business for decades is used to thinking about everyone else and may reach the negotiating table without having asked what they themselves want. That question deserves a written answer before the family’s views fill the whole room.
A sale also turns a company, hard to divide and hard to value, into a sum anyone can count, and that change sometimes alters the atmosphere in a family more than the decision to sell. What you tell whom, and when, is worth thinking through with your advisers before you sign.
When should you tell your employees?
While the deal is being negotiated, usually very few people know: you, your advisers and sometimes one or two senior managers needed to prepare what the buyer asks for. That discretion protects the workforce itself. A sale that becomes known too early takes on a life of its own: your best people start listening to other offers, key customers ask questions, competitors make use of it, and all of this happens even if nothing is signed in the end.
That discretion has a personal cost that is seldom mentioned. Every morning you pass people who have spent half their working lives alongside you, who may once have heard you say that nobody here need worry while you were around, and you cannot tell them what is going on. Some owners experience that period as a small daily disloyalty.
What the buyer takes on regarding staff, what happens to employment contracts depending on how the deal is structured, and what commitments can be secured in writing are questions for your lawyer, to be raised early rather than at the last meeting. In some transactions the law also requires employees or their representatives to be informed or consulted on a timetable of its own; your lawyer will tell you whether that applies. Your part is to know what matters to you: which people, which conditions, what you would not sign even if everything else were right.
When the time comes to announce it, it helps to have thought about who should hear it from you in person rather than from a memo: those who started out with you, the management team, perhaps long-standing customers. It is a small decision that says a great deal about how you want to leave.
What should your advisers look at first?
Anything that is a figure, a contract or a tax question belongs with professionals, and they must act before anyone else, including us. Without their numbers in front of you, any thinking about selling or keeping is done blind. We explain why we keep to that order in our note Where the lawyer ends.
What the business is worth
An adviser who specialises in selling companies will tell you what your business is worth to the market, which almost never matches what it is worth to you. A gap between the two figures is normal. It is worth knowing early, because many negotiations break down over it for no apparent reason.
What you keep after tax
The price in the offer and what you actually receive are two different figures. The difference depends on how the sale is structured, who holds the shares and when it happens, and only your tax adviser can calculate it. Ask for that calculation before you sign a letter of intent or any document setting the price or structure.
The contract and what you take on as seller
The sale agreement covers far more than the price: the statements you make about the company and your liability if they prove inaccurate, deferred payments, the non-compete clause, the handover period. That is your lawyer’s territory, and it helps if they have experience of such transactions. A notary is also involved where the transaction requires it.
Three questions for every adviser
You can ask them without giving offence. How they are paid, and whether part of their fee depends on the sale going through: that is legitimate information. Which scenario you have not yet asked them to examine, such as selling later, selling only part of the business or not selling at all. And what, in concrete terms, happens if you say no.
Questions only you can answer
Once your advisers have done their part, a short list of questions remains that nobody can answer for you. Answer them in writing and read your answers again a few days later:
- Why do I want to sell, in one sentence that does not mention the price?
- Why now, rather than a few years ago or a few years from now?
- What am I not prepared to lose: the name, the staff, the building, the final say?
- What will I do with my days, and with everything I know, when I no longer run the business?
- If the offer vanished tomorrow, would I feel relief or loss?
The last is usually the most revealing. Relief suggests that the decision to leave had been taken before the offer arrived; a sense of loss, that the offer has arrived before the decision. Neither answer tells you whether to sell. They show the position from which you are about to sign, or not.
These questions are usually answered alone, because a sale is almost always prepared alone. Your staff cannot know, your family has its own stake in the answer, and your advisers are there for the transaction, which is their brief. We describe the loneliness of the person who decides in our note No one to talk to.
This is where a private conversation can have its place: once the technical work is done and only the deciding is left. What we look at with you is your situation: how long you have been thinking about selling, what changed just before, what holds you back and what you fear. Whether to sell, when and to whom is for you to decide with your advisers; we work alongside your lawyers and advisers, never in their place.
So the right moment to speak to us is neither the very beginning, when there is no valuation and no tax calculation yet, nor the eve of a buyer’s deadline: at those points what you need is your advisers. The first step is a conversation by WhatsApp or telephone, in English with Tony Alcalá. We listen, assess whether we can contribute anything and tell you yes or no, with the reason. If it is yes, the scope, the duration and a firm price are agreed before anything begins, as explained in what happens before we accept a case.
Not selling is a decision too
Saying no to an offer, or “not now”, is as legitimate as saying yes. A rejected offer does, however, tend to become a benchmark: every weak year is measured against it, it hovers over every family lunch, and the question “what if I had sold?” turns up at the worst moments.
Not selling does not mean everything stays as it is. The business still needs a future: someone to run it when you no longer can, a handover that has been prepared, perhaps a sale later on and on different terms. The possible routes, such as bringing in a partner, selling to your own managers or preparing the company for a future transaction, are for your advisers to examine; which of them fits the life you want is for you to decide.
A decision taken with the figures explained and the reasons named does not spare you later days of doubt, but it tends to hold up better when they come. What weighs most over the years is seldom having sold or not sold, but having decided without quite knowing why.
Frequently asked questions
Is it normal to have doubts about selling my business?
Yes, it is common, even when the offer is good and the sale has been planned for years. Doubt does not in itself tell you whether to accept or turn down the deal; it means something has not yet been thought through. If it concerns the price or the terms, your lawyer and your tax adviser can clarify it. If it concerns the timing or who you will be afterwards, no improvement in the offer will clear it.
How do I know if it is the right time to sell my business?
No one can pick the moment for you; what you can check is whether two things coincide: your advisers consider the figures, the market and the tax position favourable, and you know why you want to sell now and what you will do afterwards. The first part is examined with data; only you can answer the second.
What advisers do I need to sell my business?
Usually an adviser who specialises in selling companies, for the valuation and the negotiation; a tax adviser, to calculate what you will keep and help structure the deal; and a lawyer experienced in this kind of contract. A notary also takes part where the transaction requires it. All of them should be involved before you sign a letter of intent or anything setting the price or structure.
When should I tell employees the business is being sold?
When your lawyer advises you to, because in some transactions the law requires employees or their representatives to be informed or consulted on a timetable of its own. Beyond that, while the deal is being negotiated only a very small circle usually knows, since a sale that becomes known too early unsettles staff and customers even if it never goes through. What you can prepare is who should hear the news from you in person.
What should I do after selling my business?
Ideally, you will have thought about it before signing: what your days will look like, what you will do with what you know, what role you will have if you stay on for a while, and what the non-compete clause rules out. Investing the proceeds is a matter for your wealth adviser and your tax adviser. The first months tend to fill themselves; what needs attention is what comes after, when the telephone rings less often.
Who can I talk to confidentially about selling my business?
First, your lawyer, who is bound by professional confidentiality, and the advisers working on the transaction; inside the company, only the smallest circle the deal requires. Once the figures are clear and what remains open is the decision, a private conversation may make sense: what you tell us is known to two people, Tony Alcalá and Patty García. Presenting your situation costs nothing and commits you to nothing.
If your situation requires it, present it.
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