This is article one of four in our series, “Navigating & Optimizing the Sale of a Private Business – The Definitive Collection.” Steven M. Rathbone – Vice Chairman & Managing Director, Investment Banking at Stout – shares his 20+ years of M&A experience, having advised some of the nation’s leading private companies, founders, families and investors.

Throughout the collection, he shares practical and actionable advice on how owners can prepare for and execute the sale of their business confidently and successfully. Steven provides decades of dealmaking experience gained through managing complex situations, difficult negotiations, thousands of personalities, the spectrum of objectives, and more. Across the series, Steven addresses how to i) commence the process from a position of clarity and strength by managing personal well-being, ii) best prepare for a successful process and outcome by setting objectives, iii) manage the timing of your decision and exercise control over the timing of your transaction, and iv) navigate the sale process as seamlessly as possible by getting educated on the key components.

Selling a business represents the culmination of years, and at most times decades, of hard work, dedication, and personal investment. Owners should experience excitement for the future, anticipation for a coming retirement, pride at seeing the next generation take the helm, nostalgia for the many past years of building the business, and the mixed emotions of passing their legacy into another’s hands.

The weight of that decision can be daunting, compounded by unexpected stressors that will arise during the sale process. By deploying a strategy for managing mental, emotional and physical well-being, owners can be best prepared to undertake this process and position themselves for optimal results to maximize future health and wealth. Paying attention to wellness and self-care creates a strong foundation for making sound decisions during a stressful time.

Strategies for Emotional Preparedness

For many owners, emotional factors can profoundly shape their experience of the sale process. Over the years, employees and customers may have become an extended family, bound by shared experiences and mutual growth. The thought of parting ways or worrying about their future under new ownership can evoke a deep sense responsibility.

Family dynamics can compound that, especially when family members are involved in the business or have differing opinions about a sale or how it is conducted. Conflicts can strain relationships and complicate decision making.

Moving through the sale process will require a delicate balance of empathy, communication, and strategic planning to ensure that personal and professional relationships are respected and preserved throughout.

Open and Honest Communication With the Deal Team

When appropriate, open and honest communication with a carefully selected group of internal stakeholders can be the right strategy to get the ball rolling. Strict confidentiality of the sale process is desired, and often required, in most situations.

However, selecting those in management or among the employee base who are necessary to assist in the undertaking, while exercising trust by bringing them into the circle and informing them of the pending sale process, can help mitigate feelings of uncertainty, build trust among the group and enable workload sharing. Creating a team around you offers relief of the intense pressures of trying to go it alone while representing to your buyer/investor counterparts buy-in from the core team.

Transparent communication fosters a feeling of value among the core group, aiding a smoother process by reducing resistance and anxiety.

The Right Advice

Professional advice from your trusted financial advisors, business consultants, accountants and legal experts can provide objective guidance on professional concerns along with perspective, allowing you to devote more energy to your wellbeing and foundational health.

Setting Boundaries and Expectations

Clear boundaries and managing expectations within the family and shareholder base may be needed when dealing with internal relationship dynamics. This may entail family meetings to discuss the sale openly, addressing concerns or conflicts head-on, and potentially involving a neutral third party to facilitate difficult conversations should they arise.

Establishing a clear plan for family members involved in the business can help reduce misunderstandings and ensure that everyone’s interests are considered. This can help prevent family dynamics from negatively impacting the sale process while maintaining healthy relationships post-sale.

Prioritizing Self-Care

Owners should prioritize activities that promote well-being, such as continuing or engaging in hobbies that provide a break from the stress of the sale process. Maintaining your regular physical exercise, adequate sleep and good nutrition regimen can be vital, and seeking support from peers who have gone through similar experiences can offer valuable insights and emotional support.

Focusing on the Future

By envisioning the opportunities that the sale can bring—whether it’s building wealth, retirement, starting a new venture, enjoying more personal time, or a combination of each of these elements and more—owners should endeavor to frame the sale experience in a positive light. Setting new personal and professional goals can create a sense of excitement and purpose, helping to balance out potential emotional challenges such as letting go.

Strategies for Mental Preparedness

In addition to the emotion involved in a sale, the business practicalities of such a significant decision can add a significant workload and pressures. Most business sales are the first, and often the last, times a private business owner will sell a company. In this case, inexperience will often lead to uncertainty and second-guessing decisions. The need for confidentiality adds another layer, as owners must carefully manage information to avoid unsettling employees or risking unnecessary disruption.

Competing priorities come into play, such as balancing the financial return with the need to find a buyer/investor aligned with the company’s values and culture. Plus, owners must juggle the quality and cost of advisors, striving to secure top-notch guidance without overspending or over-complicating the process.

Thankfully, a strategic approach and a strong support system can help a first-time seller make informed, confident decisions throughout the sale process and react like a pro to the difficult twists and turns which are likely to be encountered.

Assembling an Experienced Advisory Team Whom You Actually Enjoy Working With

Owners should assemble their team of experienced advisors early in the process, including an investment banker, transaction legal counsel, accountants, and when needed external consultants or mentors who have a track record of successfully guiding business owners through a sale or providing readiness advice.

Your team’s expertise will more than compensate for any lack of direct transaction experience, providing a buffer against the uncertainty and complexity of the transaction highs and lows. Regular meetings and open communication with these advisors helps the owner stay informed and atop key issues.

In addition, it is critical that you select advisors you actually like and can envision yourself relying upon in a myriad of circumstances, which run the entire spectrum of intense pressure through the celebration of a successful outcome. Ask the question of yourself: “which of these people would I trust and rely upon in the trenches with me?” as this analogy is appropriate when difficulties arise.

The character of those you place your trust in matters perhaps as much as any other element you will need to consider throughout the process.

Maintaining Confidentiality

Strategies such as implementing non-disclosure agreements (NDAs) with key members of your internal working group or those you determine to bring into the circle of trust can help protect from internal and external leaks and generally act as a pact of trust and understanding (in contrast to legal recourse, which one rarely wishes to leverage against those close to them) while protecting sensitive information.

Clear communication plans and regular meetings among those in the circle and the company’s advisors should be established to ensure an open channel of communication and regular status updates, as well as ensure that only necessary information is shared at appropriate times. Trusted advisors can provide guidance on how to manage internal communications to maintain stability and efficiencies within the circle, and the company, during the sale process.

Balancing Competing Priorities

Balancing competing priorities, such as maximizing financial return and finding a buyer who aligns with the company’s values, requires a clear set of criteria and priorities. Owners should define their non-negotiables and nice-to-haves early in the process (which we will discuss in detail in Part II). While these may change, setting a baseline is important for focus and giving yourself a berth within which to operate, without becoming tied to a certain outcome.

Evaluating the Quality and Cost of Your Advisory Team

Personal stressors can be further managed when an owner performs thorough due diligence on the professionals they hire to ensure they are getting not only the right advisors and value for the eventual cost, but a comfort level with the individuals responsible for running the deal. This will help you avoid sleepless nights and might involve interviewing multiple candidates, or better, seeking proven referrals from your trusted peers and network.

Transparent discussions and correct, clear documentation about fees and scope of services to be rendered can prevent misunderstandings and ensure that the advisory team is aligned with the owner’s budget and expectations. Additionally, owners should consider the long-term benefits of investing in high-quality advice, as the right guidance will not only significantly impact the overall success and profitability of the sale but will get you through the transaction with a greater level of support and thus retention of your vital energy and health.

Strategies for Physical Preparedness

Physical stress during the selling process can significantly impact an owner’s well-being, enthusiasm for the deal, and overall effectiveness during the transaction period. Realistic expectations, maintenance of good habits plus appropriate preparation is key.

Existing health issues can be exacerbated by the stress of the sale process, arising or worsening, and can include fatigue, insomnia, or other conditions. The increasing workload associated with preparing the business for sale—such as gathering financial documentation, meeting with potential buyers and fielding numerous calls, and managing due diligence—can encroach on work and personal time, disrupting work-life balance or worse, leading to burnout.

Prioritizing Health and Well-Being

The good news is that physical well-being is an element well within the control of most owners pursuing a sale process. Carving out time for regular exercise workouts, ensuring you prioritize time with family, spending time in nature, adopting healthy sleep habits, committing to “silent” periods (i.e., smartphone off), keeping your vacation commitments (albeit, perhaps not so close to the proposed closing date) and checking in with your healthcare team as needed are ways of maintaining control and thus minimizing the stress on your body and mind during the sale process. Simply staying ahead of issues arising and keeping this within your control is, in and of itself, a de-stressor.

Stress-reducing activities such as yoga or simple breathing exercises can help mitigate the physical effects of stress and ensure greater energy and vitality during your day. Ensuring adequate sleep, maintaining a balanced diet, and staying hydrated are foundational elements of health that can enhance overall resilience.

Time Management and Delegation

Owners, in conjunction with their advisors, should create a detailed timeline and checklist of all tasks associated with the sale process, breaking them down into manageable segments. Utilizing group project management tools can help keep track of deadlines and responsibilities and maintain a healthy cadence of communication and coordination.

Additionally, delegating tasks to trusted team members or hiring temporary staff can alleviate some of the burden. This not only helps maintain a work-life balance but also ensures that the owner can focus on high-priority tasks that require their direct attention.

Mitigating Travel Complications

In many cases, virtual meetings can be utilized to reduce the need for spontaneous travel during busy periods. Should travel be unavoidable, planning trips efficiently to minimize time away from home, or perhaps combining business travel with a mini vacation, can help reduce physical strain. Owners should also allow for recovery time after long trips to adjust and rest. Investing in travel conveniences, such as comfortable accommodations and direct flights, can make the travel experience less taxing.

Building a Support Network

Build a strong support network that includes your professional network, transaction advisors, internal team members, family and friends. Having a network to lean and rely on can provide various degrees of enduring support, making it easier to manage the varying demands of the sale process.

Incorporating Physical Exercise

Incorporating regular physical exercise via a plan that suits your lifestyle into your routine can act as a powerful antidote to stress. Whether it’s a morning jog, a session at the gym, or a walk during lunch breaks, regular physical activity can boost energy levels, oxygenate the body, improve mood, lower stress, and enhance overall health. Just making sure you move and get outside every day helps. Purchasing a device (for example, a hybrid smartwatch which not only tracks health metrics but acts as a catalyst for physical activity and good physical habit forming) which links to your smartphone may be a great idea to ensure this component of your preparation.

Your Well-Being as a Catalyst for Success through Strength

The sale of a business, while inherently challenging, should lead to a deeply fulfilling milestone and the accomplishment of lifelong goals. With realistic expectations and a wellness plan, owners can positively anticipate the process dynamics while managing the stressors which naturally arise, making tasks manageable, creating opportunities for personal growth and maintaining positive physical and emotional habits throughout.

A healthy mind and body and a focus on personal well-being is a critical consideration to begin the planning and execution phase of your transaction. With 20+ years of hindsight, I can categorically say that it is an area which is frequently overlooked, however, of critical importance to navigating the challenges of the sale process.

The culmination of selling a business represents the realization of years of hard work and the opening of new doors for personal and professional pursuits. Whether it’s embarking on a new venture, enjoying a well-deserved break or retirement, or pursuing long-held personal aspirations, the possibilities are vast and exciting and a foundation of health will ensure your next chapter is enduring and fulfilling.

I hope you have enjoyed and found value in this article. Part II will address setting and prioritizing goals during the sale process. In the interim, I welcome a discussion with you in confidence should you wish to touch on any of the elements herein or discuss a topic of your choosing.