First Time You Toy with Selling Your Firm

The heat index is 112. I just walked the uneven, steep edges of a field, spreading the tall grass so I could see, knowing that 2.4 chiggers per square inch were smiling at the prospect of squeezing into the warm, dark, sweaty skin folds of my body on this August day, lodging themselves in those places where you shouldn’t really be scratching in public. I was looking for fallen tree limbs that would incapacitate the big mower.

That big mower weighed 4,000 lbs, was 15 feet wide, could cut through 5-inch trees, and was hinged in three places to follow the contours of the heavily sloped field. And my next sweaty task was hooking it up to an 8,000 lb M5-111 Kubota ag tractor without losing a hand or finger.

I hadn’t yet showered, in a mad rush to beat the chiggers (and ticks) to their prey, and I hadn’t yet settled into the air-conditioned cab with full stereo and air-suspension seat with arm rests, power steering, and manual transmission of 24 speeds.

The boundary was that shower. Before the boundary, I was ready to sell this big damn farm. After the shower I loved it.

Your Mixed Plans

You too flip from loving your firm to wanting to sell it, sometimes in the same day. No kid in his or her right mind sat in an elementary school class and dreamed of managing people, pledging their home to guarantee a line of credit, or take an angry call from an unfair client.

What you might have signed up for was being your own boss, making pretty good money, choosing the people you got to work with, and building something that you’re proud of.

It’s crazy, right, but you wouldn’t trade it for the world.

Or would you.

When that Doubt First Pops to the Surface

There are lots of silly temptations to sell your firm, and you even joke about it. But when that sensation starts to act like an inner tube you’re trying to hold under water—and just can’t—it might be time to have an honest look at it. I’m not trying to talk you into anything, either. Our strong preference at Punctuation is for you to fix your firm and run it so that you aren’t tempted to sell it, and only sell it when it’s the right time, but that’s not always possible.

And there are lots of reasons to think about your future differently:

• You want to play on a bigger platform. Bigger clients, bigger budgets, bigger teams.
• You want to focus on what you do best and not all the other things that come with it. That could be sales, managing creatives, operations, or strategy.
• You’ve taken the firm to a great place, but you don’t have it in you to take it to the next one. It requires a professional approach to management that bores you.
• You like building things and not running them.
• The marketplace has changed and there’s a new service offering that you really need to add, or your firm is the service offering that someone else really needs to buy.
• You’ve realized, unlike the generation before you in this field, that careers are a bit accidental and you can have a different, even unrelated one.
• It’s time to let the next generation figure things out.
• You like the idea of taking some money off the table and derisking your relationship with this firm.

Every potential seller has a unique blend of reasons.

When It Hits

Here are suggestions for when those “sell the farm” thoughts pop into your head.

First, don’t ignore them. Even better, jump on them. Think about them. Talk about them with your closest advisor(s) and friend(s). Be completely honest and listen to what you hear in return. They will not go away if you just ignore them. The inner tube will rise to the surface.

Second, play this game of constraints: you can never sell your firm. If that were true, what would you need to fix so that it doesn’t annoy you anymore? Work on those things, learn to live them, or sell the place.

Third, do the opposite constraint: pretend that you must sell your firm! What are the weaknesses that a buyer would see when they take a closer look? Fix those things, and in the process, you’ll feel even less pressure to sell it. Those will usually be a combination of positioning, a better new business plan, consistent profit/growth, stronger recurring revenue, a strong leadership team, and no client concentration. (Let us know if you need a healthy dose of “Prep for Sale” planning.)

Fourth, put a timeline on this so that you have something to work towards. You’ve overcome some fairly daunting obstacles in the past and chances are good that you’ll figure this out, too.

To put a bow on the story at the outset, I finished mowing last week. We’re keeping the place for now, but check with me again in six weeks.