January 1, 2013 marked the day of my new life as employee, versus entrepreneur. I had lots to celebrate: I had successfully sold my small service firm to a well-respected, larger company in our space, all of our employees came over, my commute shortened, and I no longer had the weight of payroll, cashflow and sales on my shoulders. The deal had reasonable terms and life looked good.
It was also practically the scariest day of my life. I remember sitting in my new cubicle, at my new desk, the first day, being so self-conscious I didn’t know what to do with my hands. My 20-year identity as a business owner was gone, and my new identity had yet to reveal itself to me. What was my role here?
How does one go from authority and power to a more “managing up” reality?
Now, six months later, I can look back and have some insights about both the sales process and the integration process.
Here are my lessons learned:
- Get a lawyer and accountant who have done lots of sales. You will be leaning on them heavily to help you figure out such arcane things as stock versus asset sale, winding down your old company, and IRS issues. While we had a great lawyer and accountant for running a company, they did not have a lot of experience with selling a company, and that lack of experience lead to some anxiety and opportunities missed.
- Be prepared for culture shock. Not the shock of working for a new company, but the culture of owner to the culture of employee. Employee mind is different: you are making new people happy, in new ways. Owner mind is looking out and setting vision; finding clients, making it all run smoothly. Employee mind is influence, not power; meeting other people’s goals; living by other people’s rules.
- Know it will get better. A friend of mine who used to buy small companies said they paid out bonuses at six months because they knew a large percentage of business owners wouldn’t be able to hack the transition and would bail before then. Every day has been better than the one before, and I’m starting to like being an employee.
- Pick your company to sell to well. I was really lucky: I now work for a great company with great systems, new business practices, quality orientation. There is little drama and lots of great people. The owners have kept their words and been flexible. But it wasn’t just luck: we worked together on a couple of projects prior to making the deal, and it felt good. That informed our decision and helped make the sale a success.
- Don’t slack. One of the reasons the sale has worked is that our division has met its financial goals as part of the new company. Our energy in keeping up relationships, finding new clients, selling strategy services into existing clients and playing well with the rest of the company has served us well as we continue our integration.
Selling my company was a dream realized, and I’m glad I did it. But for those venturing into the fray, know that it will be harder than you expect.