Most business owners personally identify with the businesses they own.
As such, it's tough to imagine life without the business.
Believe it or not, this can create a major obstacle to selling a business. An owner who does not have a clear vision of what they will do after selling a company will often get cold feet prior to closing the deal. They are afraid to leap into the void, scared to experience what it's like to not be in the line of fire that is part and parcel of entrepreneurial life.
When a business owner is not truly committed to selling his business, prospective buyers can tell. If they sense hesitation, they may not take a serious look at the business, knowing that the seller may not be able to part with his or her baby.
Similarly, business brokers may not want to work with a seller who may later have misgivings about selling the business.
For these reasons, part of selling a business is having clarity on what you will do after you are no longer part of the business. Business brokers will ask you what you will do next, as will prospective buyers. You need to have a good answer and it needs to be for real.
Maybe you want to start another business. Maybe you intend on writing a book. Perhaps you are simply ready to work on your golf game and spend time with family. Regardless of what your plan is, you should have a plan for what you will do after selling the business. Just as you may have had a business plan to run the business, it's a good idea to have a life plan that will serve as your roadmap after you sell the company.
In addition to giving buyers and business brokers comfort that you are serious about selling a business, there is another advantage to defining your future plans.
Specifically, the extent to which your future plans are dependent on the proceeds from the sale may dictate what price you would like to sell the business for. Hopefully, the market value of the business jives with what you need to pursue the plans you've laid out for the next stage of your life. If not, it's better to realize that sooner, rather than later.
Finally, before you get too far along in laying out your future plans, you'll need to consider whether you might need to have some ongoing involvement in the business. In many cases, buyers want owners to stick around for a while and ensure a smooth transition. If you think that may be necessary to facilitating the sale of your business, you'll want to work that transition time into your plans as well.