Your Life Simplified

It’s a Transition, Not a Transaction: Selling Your Business Without Regret

September 15, 2020

After spending years building up a business, many people may hesitate when it comes time to sell off an asset that has become precious to them. Denise Logan, author of The Seller’s Journey, discusses aspects of selling a business and how this transaction goes much deeper than just monetary value. She shares experiences such as what can cause a deal to fall through, compromises to keep a deal alive and things to keep in mind if you’re approaching a selling point in your journey.


George Fernandez: Thank you for downloading this episode of Your Life, Simplified. My name is George Fernandez, and I’ll be your host for this episode. Here at Your Life, Simplified, we strive to bring you relevant and timely topics that simplify your life, and for business owners out there, there’s one particular event that needs simplifying, and that is a transition as you walk away from your business. It’s not a matter of if it’s going to happen—it’s just a matter of when it’s going to happen. And when that time does come, the question then is, do you want to do it on your terms or someone else’s? Well, here at Mariner, we have a specialized group that actually works with our clients that helps them navigate through this process, whether it’s combining sellers and buyers and buyers and sellers and negotiating the deal, Tom Tilley of our investment banking and valuation team actually works very closely with our clients on this process.  

But today, we’re going to focus our attention on another piece of the puzzle. And that piece of the puzzle is you. Because without realizing it sometimes, we might actually derail the entire process. To help me understand and better communicate and walk through this process for their clients, I have someone here with me to help us walk through this conversation, Denise Logan, who we call the “seller’s whisperer,” has walked through this with many clients over the last several years—to walk through the process of transitioning away from your business and the right way. So, Denise, welcome to the show.  

Denise Logan: Hi, George. It’s so nice to be with you today. 

George: We’ve had this conversation on many occasions, and it’s really great to gather back together, especially at the time of this particular recording. There’s a lot going on in the economy right now. And I would imagine that it’s probably affecting business owners as they consider the transition away from the business, especially at this time. But before we talk about that, why don’t we give the folks or listeners a little background of who you are and how you became the seller’s whisperer. 

Denise: In my early life, I was a mental health professional, and then I became a lawyer, and I watched deals unraveling for all the reasons that were not what was being said. In this market, it’s so valuable to understand what’s going on for an owner. Less than one-third of all deals that go to the marketplace actually close. That means that of business owners, only one-third of them are actually reaping the wealth from the work that they have spent their life building. And to me, that’s a tragedy.  

We spend a lot of time thinking about a wealth event, but if an owner is unable to successfully exit their business, all of the planning is for naught. And so, one of the things I saw was with that low close ratio, we needed to try to find another way to help owners navigate the transition. And so 10 years ago, I started working one on one with owners and their advisors to help them navigate those predictable emotional obstacles that can prevent them from letting go and looking at how to help them avoid what in the industry is called seller’s remorse: owners who do sell their business, but then feel sad about it later and wish they hadn’t.  

George: That’s incredible. You brought in the front end of that, you said that it’s one-third. And when you think about that, that’s a lot of people. Last count, the last research I’ve read, there’s about 30 million business owners out there, you know? So just one-third of them. And that’s a lot of business owners out there that do struggle with this whole transition. And when you consider that they’ve worked in it their entire life, and this is probably the largest asset that they have, and this is probably the asset that’s going to carry them through their own personal retirement, that is a significant issue that we need to look at how we address. I really appreciate the opportunity to be here today. So, let’s kind of dig into some top of mind questions and we talk about this topic. And so, starting with, why do you think some successful business owners have a hard time letting go? Let’s kind of hit that head on right there.  

Denise: One of the questions that I always ask an owner when I first meet them is, “What does work provide for you?” And it’s very easy for the transactional professionals to get focused on the money. And money, of course, is one of the many things that work provides for us. But when we drop down, we should be able to find somewhere between 10 and 12 distinct answers to that question: “What does work provide?” So aside from money, for many of our owners, it’s a place to go. We’re recording this during the time of coronavirus when many of us are stuck at home. I’ll bet lots of your listeners could imagine that if they could get out of the house and be somewhere else, that would be something that work provides.  

Another thing that work provides for owners is their sense of camaraderie and friendship. For many owners, their employees, their peers, their customers, their vendors are their friends. So I know George, you and I have had this conversation before, “Who are your Saturday friends?” or “Who are your weekend friends?” Think about those pieces of what’s going on for our owners. When they start to contemplate letting go of their business, we want to look at those many things that they’re getting provided. Sometimes power. The things that come up later in answering that question, What does work provide?, are the ones that can derail a deal later.  

Can I tell you the story of one owner? We often think that it’s only owners who are of a particular age who will struggle with letting go of their business, but letting of a business, no matter whether it’s early in your career or later in your career, those same obstacles start to surface. So, this particular owner was in his middle thirties, and he was selling his business, a software company on the West Coast. He was set to net $16 million on the other side of the sale. And one day he realized, Who am I going to hang out with during the day? All my buddies have jobs. And so he was out one night with a friend, and he said that to his buddy. He said, “Who am I going to hang out with?” To which his friend responded, “Boo hoo, dude, I wish I had your sad, little $16 million problem.”  

Well, that’s a really normal answer to receive. For this fellow, the problem didn’t go away. It just went underground and started getting acted out in his deal. And the more that was happening, the more the advisors who were involved in that transaction were talking to him about the money he was going to receive, when in reality, he was grieving the loss of many things that work had provided for him. The owners who successfully exit and have the best post-closing life at new chapter are those who have really thought about what work provides and how those needs are going to get met, because the needs don’t go away just because we get a big stack of cash.  

George: Yeah. They’re all really great points. It reminds me of when we go through just a traditional wealth planning engagement where we’re not dealing with a business sale, there’s really two fundamental questions that we try to address when we have those conversations with clients, and that is, “What’s the importance of money in their life?,” because that’s clearly an important piece when you talk about financial planning. But we also have a second question, which is, “What’s most important in your life?” And it’s the convergence of those two questions where real financial planning really sits, because the motives and the emotions that you have that are happening behind the scenes drive your decisions.  

And so, if things aren’t going well on that side, it will impact how you feel about the transaction or about the investment or whatever it is at that financial part of your life is taken care of. So, it’s all really great points. Thinking about that process then is, how do we make that process easier for business owners, then? If that is such a big challenge, how do we make it easier? 

Denise: The first part is recognizing that we’re an owner. This is a transition; it’s not a transaction. For the lawyer and the banker and the wealth manager and a CPA, and maybe even for the buyer, this is a transaction. And so, being prepared will help our owners, helping them to think in advance, what are the likely emotional obstacles that might come up? An example is the very first time we poke at financials in a deal, the seller is likely to be filled with shame. And whenever I tell an owner that, they’ll say, “I have nothing to be ashamed of.” I’m like, “I know, of course you don’t.” But that moment, when an owner who is used to being the one who knows all of the answers, who knows everything about what’s going on in their business, the thought that someone else will be touching those financials, someone might find something they didn’t know, can trigger a natural, emotional reaction called shame.  

So there’s a part of our brain called the amygdala, the fear sensor in our brain. And it’s a helpful part of our brain, right? It’s always looking for danger in the world. The unfortunate part is it can’t distinguish between real danger and imaginary danger. So sometimes in a situation like that, the amygdala will sense danger. “Oh my gosh, what if I look dumb?” And we’re each wired to handle fear differently. So being able to prepare an owner in advance for many of the emotional parts of what they will face in letting go of their business will help them to navigate it easier. Because a natural reaction when we feel fear or shame is to pull away.  

So we often see owners do this. We call it approach/avoid. They come forward, they’re like, “Yeah, I think I might want to sell my business.” Then part way through the transaction, they realize the transition is happening, and they get scared and pull back. When an owner pulls away, the likelihood of them returning to the process and having a good result is less. That’s why preparing them in advance for what they’re likely to feel, not just how the transaction will go, but what are the transitional moments. And I’m happy to share another story if you’d like. 

George: Sure, that’d be great. I think you’d be a good example of that.  

Denise: So, this particular deal was an $85 million sale. Eight weeks before the closing, the owner suddenly announced that he would not take a penny less than nine times EBITDA. Never mind that he had already signed a letter of intent at 6.2 times. So, the investment banker called me and said, “I think my seller went crazy.” I said, “Yeah, sounds like it. Let’s figure out what scared your fella and what hidey-hole he might’ve gone in and if we can coax him to come back out.” So what had happened is the owner’s original plan was to sell the business, buy a sailboat and sail around the globe. And you can get a pretty good boat for $85 million.  

George: I would think so.  

Denise: But two weeks before he asked for this unicorn, his wife said to him, “I’m not doing that. I do not want to be stuck on a boat with you far away from my grandkid. No way.” And can we agree, George, he is not coming back to the deal team to tell them that the deal is off because his wife won’t let him do what he wants to do. 

George: Yeah, probably not going to happen.  

Denise: For the advisors, this was the very first time that the wife had ever said she didn’t want to sail. And so often what happens is owners will talk to us about their dreams and their plans for the future, golf, travel. That is not a real plan.  

And so, when I got involved in this process, I sorted out what was happening between husband and wife. And it really wasn’t about the money, right? That’s where he came back to the deal team and said he wanted more money. What we did was we created a solution where he would buy the sailboat and sail, and every six weeks she would take one grandchild, fly to where he was. They would do two weeks on land building memories with the child. She would fly home, and he would sail home. Boom, the deal was back on track and closed on time at its original price.  

That’s an example of an owner who almost killed their own deal because of something emotional that makes perfect sense. They were struggling with what we refer to as relational grief. Here’s a couple who had grown apart. We see it in lots of couples where when children first launch, husband and wife look at each other and say, “Who are you? I don’t know if I know you anymore.” And for a couple, when they’re selling their business, that’s another moment of relational transition. And if they don’t have common, aligned goals, it’s very easy for the business to become almost like a third child. You want to keep it in the nest. And so owners, when they face that moment, if they haven’t been prepared for it, the deal will fall apart.   

George: Again, very similar to traditional wealth management, when you always want to have the conversation with both spouses, and you want to bring up what the individual goals are for each one of the spouses to fully understand directionally where they’re both headed. And hopefully, it’s in alignment. And when it isn’t, at least you’re able to have a conversation prepared for that.  

So, we talked before about the preparing for the sale. You mentioned that just briefly in your conversation, in your comments just now. But do you think owners forget to prepare themselves for that as well? We’re talking about at the end where the sale is taking place, but what could they have done beforehand?  

Denise: We celebrate grand openings of businesses, and there’s tons of energy put into celebrating new businesses that arise. Every owner will leave their business, voluntarily or involuntarily. The reality is that we will. And so, I’ll often hear owners say, “Well, if I sell my business” or “If I retire,” and I always challenge them; the correct word is “When” not “If.”  

And so, I think we do forget to prepare for an exit. One of the ways we can help that is to pay attention to, if next year you were going to exit your business, how would you be preparing for that? Because lots of things cause us to exit our business. It can certainly be an economic transition, like we’re facing now. It could be any number of unpredictable life events. It could be that you simply get an offer unexpectedly. And one of the things that I see happening is that owners often think they have more time. If we ask an owner, “How many more years will you work?,” they will almost always say “five more years,” no matter how old they are, no matter where they are. And so, helping to think year by year: “Is this the year that I should be selling my business? If something came up, am I prepared? What will life be like on the other side of this business?”  

George: Yeah, that’s a really great point. And it’s interesting, you mentioned that five more years, five more years, one more year, whatever that is, that number is unique for each individual. I was just talking with someone yesterday, having this discussion, and he was sharing a story about how his business partner, who was in his early sixties, passed away, and suddenly; it was a heart attack. And there really was no time to prepare for that, obviously. And so, in the disruption that it created for the business and for the family and so forth.  

And so, when you think about business owners that are in that situation, that’s then under somebody else’s terms that you’re leaving that business. We should prepare for the uncertainty, of course, but how else do we prepare? Are there other strategies that you use to help prepare for that inevitability that’s going to take place? What are some other ideas, are there practice runs that you would take? You mentioned power earlier and that made me think about that. So, if you think of power, if you’re thinking of control, is there a preparation you could do to maybe practice letting go before you actually leave to see how well you’re going to do?  

Denise: Oh, so taking a sabbatical is an excellent approach. Right now, at a time when we’re stuck at home, that’s an interesting experience, because owners who think, “I’m not going to retire, I’m not just going to sit around and do nothing.” I’m like, “Well, of course you’re not. Who told you that retirement was going to mean sitting around doing nothing?” So, retirement for us, George, will not at all be like it was for our parents and grandparents. We’re not going to find playing golf and waiting for “Wheel of Fortune” to come on to be a satisfying retirement. But for many of us, that’s what we saw when a parent retired or when a grandparent retired, that’s all there was to look forward to.  

So, especially right now, when we’re home, often a business owner can think, “Is this it? Will it just be like this? That I’m stuck at home, looking at my spouse and there’s nowhere for us to go?” And the truth is that retirement will be what we decide to make it, and having a very clear first month, first six months, first 12 months, first three years—making those kinds of detailed plans. When I hear owners say, “I’ll travel.” To where? Let’s map out the first one year to three years of travel. Where will you go? How will you get there? How long will you stay? What will you do there? How long will you be home between trips? The more clear we’re able to make those plans, the more likely we are to keep moving forward toward an exit. And the mistake is to think that we will just know when it’s time. We never know when it’s time. 

George: Yeah. That’s a great point. So, the last question I have here is dealing with something you’ve said already, and that is seller’s remorse. Do you find yourself in situations to where the deal is done, but now, gosh, I don’t want to close or the deal’s done, either one, and I shouldn’t have signed this in the first place, whatever, I’ve got the seller’s remorse. How do you manage that?  

Denise: Seller’s remorse is a real risk, and it’s actually the number one reason that deals don’t close after they’ve been through due diligence. That the owner suddenly realizes that the needs that were being met by the business, other than the financial ones, they have no idea how to get those met. So, I wrote a book called The Seller’s Journey, and this particular book is written as a business fable. It’s the story of an owner one year after he sells his business. He goes on a trek across Glacier National Park with his banker, his lawyer, his wealth manager and the private equity buyer who bought his firm. And yes, everyone comes back alive.  

George: Oh, okay. So, it’s not a thriller, right? It sounds to me like it’s the beginning of a joke, right?  

Denise: Right. And as they cross the glacier, they relate the physical obstacles that they face crossing the glacier to the emotional obstacles that he faced in letting go of his business. And one of the really beautiful parts about the trip they took, and it’s based on a trip I took with a client—having that trip in mind was one of the things that allowed him to keep moving forward. He knew where he was going to go. He knew what he was looking forward to. And often when an owner sells a business, there’s a period of transition after they sell the business where they’re still working with the new buyer. It might be an earnout period or a training period.  

And so, the more we’re able to map out what that journey looks like for an owner, the more likely they are to make it all the way through. And for a business owner, this last chapter in their business is the most vexing time in the life of their business. And as advisors, we have the ability to help them navigate this and place them gently on the other shore where they’re looking forward to the next chapter of their life instead of regretting what they’ve let go.  

George: Yeah, all really great things. I think for all business owners listening today, I think the biggest takeaway is that number one, you’re not alone. I think that’s really important. The folks that are working with you, especially if you’re working with your wealth advisor alongside you in this process, to understand how this particular transaction—I use that term on purpose, not literally for transition purpose—but the transaction itself does have implications to their overall financial health. And it is important to ensure that the transaction itself is going to provide them the transition that they are actually talking about, that you just described, and navigating through that very successfully.  

And so, Denise, I really appreciate you taking the time to kind of go through this conversation with me today, because I think especially today, with a lot going on in the economy right now, there’s probably a lot of anxiety. And if you listened to our financial therapist’s podcast here a month or so ago, anxiety is normal, and it’s just a matter of how we respond to it. And so, you talked a lot about how we respond to all of these emotions as it relates to the sale of our business. So, I appreciate you going through that with us today.  

As we conclude today, I guess what I’d like to do is, as we end all of our conversations, number one, you’re a business owner, so it’s probably going to be your walk at some point in the future as well. But I’d also like to understand, what’s the biggest money lesson that you’ve learned in your life?  

Denise: So, I was a business owner, and I am now a business owner. So in my early life, I built a fairly large law firm in Washington, D.C. And when the time came for me to let go, I struggled a lot because I had not prepared for how would I navigate that transition. And I made a super ugly, choppy exit from my business, got rid of my house and bought a motor home. And I took off. But what I thought would be six months turned into several years. The motor home was not the bad decision. The difficult financial decision was not having prepared for how and when I would let go of my own business. And it’s absolutely the reason I do the work I do now, because I realized I wish there had been someone like me to help me through that. And so sometimes, we teach what we needed to learn.  

George: Yeah, absolutely. And it’s great that you’re doing this today, because I think this is a really great, great service. Thanks for being here.  

Denise: Nice to be with you, George.  

George: Well, thanks again for listening today. And we hope you found the information valuable. One of the things that Denise mentioned was that she has a book called The Seller’s Journey. So if you’d like a copy of that book, Denise, where can they get a copy? 

Denise: You can purchase it on my website, which is And it’s a fun little read. I’ll think you’ll enjoy it. And the next thing you know, you’ll be planning a trip of your own.  

George: Yes. And it’s a great book, great story. And the train ride was a lot of fun.  

And we thank all of you for listening as well. We hope you found the information valuable. As always, we’d love to hear from you. So, let us know how we’re doing by giving us feedback. And if you have any ideas for future podcasts, be sure to let us know that, too, by emailing us at [email protected]. And as always, we encourage you to share the podcast with family and friends, especially those business owners that you know. If they haven’t listened yet, send them a note. And don’t forget to subscribe, so you don’t miss any future episode of Your Life, Simplified. And we look forward to being with you again soon. 

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