The Business Transition Blog

Why Entrepreneurs Continue to Work

In his book, Man’s Search For Meaning, Victor Frankl wrote about the importance of purpose and a goal in one’s life. An Austrian psychiatrist, he wrote from the perspective of having survived the horrors of the Nazi concentration camps. His life in Auschwitz and his subsequent research confirmed that people who lose their sense of purpose could will themselves to die.

We all need a purpose, and for many entrepreneurs it is working at their business that provides that purpose. We need something to strive for, to stretch ourselves until the day we die; thus we extend our lives. All your life, you’ve been living with gaps that you’ve tried to close. The difference between what is and what you would like it to be. You’ve had mortgages and loans to pay off, properties to buy, places to go, new product lines to develop, new ways of doing business, new markets to pursue, and competitors to beat. If you suddenly stop, and there is no work, no creative tension in your life, you’re in danger of losing your sense of purpose and your will to live.

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Perception is Reality

“…public relations problems are usually defined by what people THINK about a set of facts, versus the truth of the matter…”[i]

Charles was in his early seventies. He was physically fit, energetic, and could easily have passed for someone much younger. He owned a competitive business that did about $10 million in sales annually. He had no successor for his business. He had no children, and no one internally had shown sufficient promise to warrant his trust as a new leader.

As far as his management team knew, there was no succession or transition plan. Charles was comfortable with that, but they weren’t. They had questions: “Who’s in charge if he dies or gets sick? Will his wife take over? She doesn’t know anything about running the business. With his autocratic management style, he makes all the decisions now and most of us would be lost if we had to start making them at this stage. We have our own families to consider. If this business doesn’t have a definable future, I have to look for other work. I can’t leave my family’s future security at risk. I wish he would talk with us about this and tell us what he has in mind.”

For reasons Charles could not fathom, he lost a number of his top employees. They couldn’t stand the uncertainty.

What do you tell employees, suppliers, bankers and clients about your plans to sell your company? How do you manage the information in such a way that it doesn’t cost you dearly in lost revenues, employees applying for other jobs, suppliers seeking out more secure channels or bankers calling your line of credit?

The prevailing wisdom would suggest that you keep it to yourself. Most of the former business owners I’ve spoken to about this tell me they didn’t tell anyone about their intention to sell the business. In some cases, even their lawyer and accountant were kept in the dark until the last minute! On the other hand, Tom Deans in his book Every Family’s Business suggests that your business should always be for sale and you shouldn’t keep it a secret. This is a contrarian view but one that appeals to me. Think about it. If it is publicly known that you are prepared to sell your business if the right offer came in, what does that do?

It tells your employees that you are a business person not their parent. As long as it is financially in your best interest to keep the company, you will. If that situation changes, you are prepared to change as well. Their best security is well-run company that is profitable and performing well.  And you can explain that even if you sell it, their best personal strategy is to be so good at what they do that their new owner sees them as indispensable and a part of what makes the deal attractive.

It tells your banker and suppliers something they already know. You’re not going to own this company forever and you are putting in place systems and procedures that make the company a valuable asset. They would rather see your company change hands because of a forward thinking plan than to see it deteriorate because you are just taking a modest income from it, have lost your passion and you’re planning to die with your boots on.

It tells your clients that the company won’t die when you do. It has a life and energy of its own that will continue to serve their needs as long as they wish to be a client.

It tells family members that if they are interested in buying the business, they better step up to the plate, let their interests be known and be prepared to argue why they should buy the company instead of a third party.

So if you’re thinking about selling your business now – or in the future, public relations are required to manage the message – internally and externally to all the stakeholders in your business. I’ve often said that in the absence of information, people will make up the facts. If you’re approaching retirement age – even if you aren’t thinking about retiring – others are wondering what’s going to happen. If you plan it properly, you should be able to confidently explain how being prepared to make the transition makes the company stronger and everyone else’s position more secure – if they are aiding and not sabotaging  the process.


[i] Robert A. Kelly, http://www.aboutpublicrelations.net/uckelly9a.htm

Seven Essentials to Sell Your Company At a Premium

Dr. Mohammed Benayoune just forwarded this article to me and it has some great points. The author, Robert Sher wrote this article for Forbes. You’ll find it at:  7 Essentials to Sell Your Company at a Premium. Thanks Mohammed!

You’ll also find another article by the same author here. This one is an excellent primer on picking good advisors to help you successfully sell your business and how to utilize them to get the best advice.