Emotions While Selling or Buying a Business!

Most business buyers underestimate how emotions can impact the business purchase process. A lot of money, time and effort is repeatedly wasted on business transactions where buyers and sellers fail to deal with each others’ emotions.

From the seller’s perspective: Business owners have spent a lot of time and energy building their business and when the time comes to sell it, they are generally not emotionally prepared. As often described in business language, their business is their “baby”. They want it to be in the right hands. They want the perfect buyer; the one that will pay the right price, will take care of employees and treat them the same way they were treated before the sale, will grow the business, will honor the seller’s previous engagement, etc. Obviously, this ideal buyer doesn’t exist. As sellers start to realise that the buyer is not ideal, hesitations start coming. Other hesitations usually haunt sellers: What if they are not satisfied with the after sale life? What if they feel lonely, lose their power and status in society?

From the buyer’s perspective: Buying a small business is closer to buying a job than to a purely financial investment. Buyers must love the business to be successful in it. Unlike simply taking a new job, buying a business is irreversible. For these reasons, business buyers live a long period of hesitation before signing the purchase and sale agreement. They are not really sure whether they see themselves managing the business. What if the day to day activity is not what they expected it to be?

It is crucial that business buyers and sellers spend the necessary time to understand each other’s emotions when contemplating a deal. All efforts must be made to nurture a healthy relationship from the beginning to the end. Buyers must understand that business owners are selling their babies and sellers must understand that buyers are making an irrevocable life changing move.

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Omar Kettani

I am a business broker in Toronto. I am specialized in selling businesses with less than $10 million in value. I have a master of Engineering from a top-notch French Engineering school and an MBA from the prestigious Richard Ivey Business school in the University of Western Ontario where I specialized in entrepreneurial finance. I have a long experience in banking, business ownership, marketing and finance. I dedicate my career to helping small and middle size business owners sell their businesses to the right buyers.

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