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Selling a Business? Be Ready to Manage Your Emotions
Ed and Sonia Ketchoyian, former owners of a PuroClean franchise in Sterling, Virginia, were prepared to sell their business in terms of the financial aspect and the negotiation. However, Ed realized that they were initially not ready to face the emotional aspect that came with the process of selling their company.
Find out on this episode of Deal Talk how Ed and Sonia had overcome the emotional challenges they encountered to eventually sell their company at the price they had always wanted. Ed Ketchoyian shares some enlightening insights and invaluable tips to help you deal with ‘unexpected’ emotional instances that might arise as you go through the process of selling your business.
Questions Answered For You
- Did you ever meet with anyone from Morgan & Westfield face-to-face? Was that even necessary?
- How was it for your employees when they found out that you were selling the company and that they would then be working for a different owner?
- Are there things [in the sales process] that you would've done differently?
- What was the most stressful part of the entire process of selling your business?
- What piece of advice can you give a business owner who is planning to sell his or her company?
If your goal is to sell your company at a price that you're happy with, you have to be able to move beyond little bumps on the road that might distract you from getting there.
Key Takeaways To Remember
- Separate your identity from your business. Some people think that your self-value as a business owner is tied to what you do for a living. However, it’s good to be able to separate yourself from your business — they are not the same.
- Be prepared with the emotional aspect that comes with selling your company. Selling a business is not only a business transaction but also an emotional experience. Valuing your company and keeping the sale confidential from your employees (and finally breaking the news to them after the closing) can make the process emotional. Be prepared to manage your emotions if you want to succeed.
- Don’t let anyone discourage you from getting what you want from the sale. As you go through the process of selling your business, you may encounter unexpected things like unreasonable demands or even insulting statements from a buyer. However, to succeed in the sale, you have to “keep your eyes on the goal that you want to accomplish.”
- Be patient. Patience is key in successfully selling a business. You will not sell your company overnight. Maintain as much patience as possible as you go through the process.
Jeff: What now? A fellow entrepreneur talks about selling his business and life after the sale. If you're a business owner looking to grow or sell your company you've come to the right place.
From our studio in Southern California, with guest experts from across the country and around the world this is "Deal Talk", brought to you by Morgan & Westfield, nationwide leader in business sales and appraisals. Now, here's your host, Jeff Allen.
Jeff: Hello and welcome back to the web's number one content source for small business owners looking to build a business for eventual sale. Here on "Deal Talk" it's our mission to provide information and guidance from our growing list of trusted experts that you and all small business owners can use to help you build your bottom line and improve your company's value.I don't know about you but I always learn a lot from my fellow business owners and I hope the same goes for you. It really kind of depends on the topic that you cover and what you discuss. On this edition of "Deal Talk" though we're going to speak with another business owner who recently sold his company in order to learn more about his unique experience with the hope that we can learn a little bit to help us successfully sell or at least prepare our business for sale with the time comes.
I'm happy to welcome today Ed Ketchoyian, joining us from Sterling, Virginia. Ed is now the former owner of a highly successful PuroClean franchise. PuroClean is a company that provides restoration services specializing in fire and water damage recovery for its residential and commercial customers. Ed Ketchoyian, welcome to "Deal Talk" sir, it's good to have you on.
Ed: Hi Jeff, good to be here.
Jeff: Why did you sell your business Ed? You sound like kind of a young guy and I understand that you had a very successful franchise where you are.
Ed: I'm not sure I'm that young but I appreciate the compliment anyway. Why did we sell? In the beginning, when we were considering buying a franchise we had a plan coming in for how long we wanted to be in the business. We're sort of thinking ahead from the beginning about how and when we might want to exit. The original plan was to exit if we could in five to seven years after establishing the business and growing it.
Unfortunately, the economy didn't quite cooperate for that time frame. So we sort of toughed it out a year or two beyond that and had some good success, and decided it was the right time after about eight and a half years to sell on a high note. And that's pretty much what we did.
Jeff: So you really only kind of missed that deadline I guess, that self-imposed time frame by maybe about a year and a half there at the very, very end. If you don't mind my asking — why did you choose that space of time to sell? Was it purely a business decision, strategic in that regard, or was it more of a personal decision to sell your company within that short five- to seven-year, but actually eight-year window?
Ed: It was primarily a business decision in the beginning. Of course, once you get into a business as an owner your emotions become involved because it's just the nature of small business ownership is you end up putting a lot of yourself into it. But in the end, it was a business decision.
Owning and selling a business is just one more business and life experience that I can take with me to whatever I’m going to be doing in the future.
Jeff: If you could summarize now for us and give us a high-level overview of the process and how it worked and who is involved.
Ed: Okay. The first step for us was after making the decision that it was time was to notify the home office at PuroClean of our intentions. That sort of got the ball rolling. After that we were referred to Morgan & Westfield who worked with us pretty closely. We decided to work with them as the broker. And they helped us a lot in terms of putting together a business summary which is essentially your marketing document or your sales document for perspective buyers.
And then Morgan & Westfield also helped as far as listing the company out on the various sites where businesses are listed. And the home office also helped out as well because they get prospects coming in all the time as part of their franchise development organization.
Jeff: I was just going to say obviously they have a real keen interest in trying to find someone that they'll be able to work with and that they know will do a great job as a new member/owner of the organization and of their own franchise. So they obviously want to find somebody who's going to be able to come in and do just as good a job if possible as you did.
Ed: Yeah, exactly. And whoever the perspective buyer is has to be vetted anyway. So it's not like I could just sell it off to some guy off the street who just expresses an interest on my own. So the home office is a party in the end to the transaction because there's a franchise license involved.
Jeff: What was the role, Ed Ketchoyian, of your wife in this process?
Ed: My wife had a very important role. In fact, she was the most important stake holder since she's also a co-owner of the business. She was very important. She provided the constant counseling and was instrumental in terms of acting as a sounding board in making sure that I'm doing my job. She was important.
Jeff: Then the process, let's get back into maybe just some of the details as we start to talk a little bit more specifically about how the process unfolded. Was this something that required a few weeks, a few months, a year, or two years? How long did it take altogether?
Ed: For us it took about a year just to go through the whole process from the time we started listing the company and having various people come along. We had some tire kickers with various level of interest. But once we had the final buyer or the serious buyer, the person who ended up buying the business have contact with us, that process took about three months. I was just looking at my emails the other day and it was almost exactly three months from first contact to the closing date.
Jeff: And so that was from the time that the buyer was actually located, the person that actually ended up buying your particular franchise, is that correct?
Jeff: Okay, very good. The buyer, was that someone who presented themselves through the franchisor? Where did they come from, actually, Ed?
Ed: He came from another business broker that I had signed some kind of agreement with early on in the process as somebody who could find prospects. That other broker may have been funneling other candidates as well.
Jeff: I see.
Ed: It's sort of like a real estate deal. You have agents for the buyers and agents for the sellers. And this person was provided to us by an agent who specializes in helping out buyers I think.
Jeff: I see. It's not like you were working with that agent before to help you sell your company, but rather you were working with them to essentially find prospect if you would for perspective buyers out there for your company. Were they ever in contact with Morgan & Westfield, the company that actually helped you sell your business?
Ed: I don't know.
To small business owners: “Your identity is not your business. It’s good to keep that perspective and be able to separate.”
Jeff: Whether agents were in touch with each other or they just came to you directly?
Ed: I think the leads were all funneled through Morgan & Westfield.
Jeff: I see. What was in your view during this process, because you probably had not yet gone through a business sales process before Ed. What was the most stressful part of the entire process from your perspective?
Ed: From my perspective, the most stressful part was after we had gone through the high-level negotiations and we were in the final weeks before close where real money is transacting and being deposited into escrow. A couple of weeks before the close, there's always that feeling or irrational anxiety that the buyer just might change his mind for some reason and just disappear or walk away.
Jeff: It may not necessarily be an irrational fear to some people listening out there because it's obviously very real, it's part of the process. And in fact, someone can get up and walk away. That's well within the right to be able to do that.
Did you feel that you and your wife as co-owners of this business were really prepared as well as you could be for the process of selling your company? Or was there kind of that get ready phase where once you met with Morgan & Westfield you realized there were some things that you had to do?
Ed: Actually, we felt pretty well-prepared for the process — I think from a business point of view. And it felt pretty good for me on the financial and negotiation aspect. That actual exercise of valuing your company is an interesting one. There are different rules of thumb out there that are like if you're in a corporate world where you just look at cash flows and do a net present value. There are different methodologies of doing that. We felt fairly well-prepared. But the other part was that we weren't necessarily prepared for the emotional part. This is more than just a business transaction, so there are certain emotions that came to play at the end that I wasn't quite expecting.
Jeff: Which, by the way, are also the types of things that we have found in our discussions with other business owners which are actually very natural. It's kind of when you feel like you're walking away from a business whether or not you're happy with how the transaction, whether or not you're getting the money that you wanted for your company you're still kind of leaving something behind that was very much a part of your life. Would you not agree that that's kind of the way that it worked for you?
Ed: Yeah, absolutely. Regardless of what your status is in the business or how the business itself is doing or has done, something that put so much of your time in especially after all of our years, about eight and a half years. It's really hard to describe to somebody else who isn't already a small business owner. It’s the expression of having your skin in the game it's just adds a different dimension to things. It's still there when you're on your way out.
Jeff: Ed Ketchoyian, what we're going to do is take a short break and when we come back what I would like to do is really kind of focus on Morgan & Westfield's role in helping you sell your business really from beginning to end where we can talk about the specifics that the company was involved in in terms of helping you get ready all the way through the final process and through the closing of your deal.
I'm Jeff Allen, I'll be back with Ed Ketchoyian. He's the former owner along with his wife of PuroClean franchise in Virginia. And we're going to continue our conversation when "Deal Talk" resumes right after this.
If you'd like to share your knowledge and expertise on any subject related to selling businesses or helping business owners improve the value of their companies, we'd like to talk with you about joining us as a guest on the future edition of "Deal Talk." Interested? Contact our host Jeff Allen directly. Just send a brief email with "I'd like to be a guest" in the subject line. In a brief message include your name, title, area of specialty, and contact information, and send it to email@example.com, that's firstname.lastname@example.org.
Selling your business may be the most important business transaction you'll ever undertake so don't go it alone. Work with an organization that has made it their business to sell businesses and that's all they do. Morgan & Westfield at 888-693-7834. At Morgan & Westfield we know that selling your company is not something you should take lightly. It can be a stressful, difficult, even emotional process. That's why it's important to work with a team whose one and only specialty is selling businesses throughout the United States. And Morgan & Westfield will help you every step of the way, from helping you plan your exit strategy, to preparing a comprehensive appraisal, and locating the right buyers.
Without the right team behind you, you could be leaving money on the table. So don't leave your most important business transaction to chance. Call Morgan & Westfield for a free consultation at 888-693-7834, 888-693-7834, or visit morganandwestfield.com.
Are you a professional adviser, accountant, attorney, or a wealth manager, or do you provide other professional services? Contact us today to see how our reliance program can help you increase your firm's revenues. Call Morgan & Westfield at 888-693-7834. That's 888-693-7834.
Jeff: We're interested to know your thoughts about "Deal Talk," what you like, and your suggestions for how we can make this show even better for you. Send us an email to email@example.com. That's firstname.lastname@example.org.
I'm Jeff Allen with Ed Ketchoyian, former owner of a PuroClean franchise in Sterling, Virginia, and we're talking about his experience selling his business and working a little bit with Morgan & Westfield to help him do that. We kind of want to now jump in to once again some of the details following your conversation the first half. We kind of talked a little bit more about things from your perspective. But what we want now to understand a little bit more about is the role that Morgan & Westfield played specifically in helping you sell your company.
Let's talk about it, exactly what did Morgan & Westfield do and you can summarize this a little bit but from the time that you contacted them what were some of the real important things that stood out about what they did for you.
Ed: Well, like I mentioned before the break they put together a business summary document which is the document that contains an overview of the business and financials, and other pictures of the business and equipment and all of that which becomes available to perspective buyers. Obviously that's a really important piece. And that's one of the things that Morgan & Westfield put together.
And so besides providing the actual listing service for the business Morgan & Westfield was available to almost anytime I have a question, providing advice. They provided help and guidance on doing the valuation exercise for helping me determine what price I wanted to list companies for. Ultimately it was my decision but it was very good to have that input.
And then second phase I guess I'll call it or in the final phase that Morgan & Westfield helps a lot in the final phase of putting together the agreement. Morgan & Westfield took the lead in putting together all the closing documents and attachments and things like that that were necessary in order to actually do the asset sale.
And that's pretty much what we had. We did an asset sale of the company or the franchise assets from my entity to the entity of the buyer and Morgan & Westfield put together the contract that enabled that to happen. The way they did that is they had a very detailed questionnaire that I filled out along with the buyer and that was used by Morgan & Westfield to put into some of their templates. And of course some items were customized. And that's pretty much how it worked. It was a very easy process for us.
We felt pretty well-prepared for the process — from the business point of view. But we weren’t necessarily prepared for the emotional part ... certain emotions came into play at the end that I wasn’t quite expecting.
Jeff: Would you call it an efficient process?
Ed: Yes, it was a very efficient process. The people at Morgan & Westfield gave us very quick turnarounds in the timetable that we had and I was pretty satisfied.
Jeff: Let's fast forward just a little bit to the closing process, what role did they play there? Because I know that obviously you are in contact with a lot of these perspective buyers and they were being funneled to you through the other broker and also too of course you had a lot of input from the franchisor. But once you got to that closing table what happened then? What was your mindset like and how did everything go for you?
Ed: A lot of the documents that we had talked through and negotiated points on, we're already completed. And when we were there it was just a matter of signing things off. Again, more like a real estate transaction where you just have a bunch of forms that you need to sign. This was not as detailed if you've ever been through a real estate transaction.
Jeff: What you're saying is it's a little bit more simplified there in this particular instance with you working with Morgan & Westfield to sit down there and get the documents and all the formalities taken care of in order to close the deal?
Ed: Yeah, exactly. On closing day it was more of a crossing the finished line kind of thing and shaking hands, and making sure, confirming checks and wires are being available. But otherwise it was more like a formality once we got to closing day.
Jeff: Let me ask you, in terms of the value that you received from Morgan & Westfield what was it that they did that they provided you with the most value? You came away thinking, "You know what, this was a really good decision."
Ed: I just felt like the overall services were provided at a very reasonable rate or price. It's hard to put my finger on just one thing. It started from the beginning of the relationship with Morgan & Westfield and toward to the end. We paid for different aspects of services that we got. But the value in what was provided was very good.
One thing that Morgan & Westfield pointed out to me which had a lot of value, I guess this could be the most valuable thing was that a lot of these closing documents that they have already been reviewed legally many times and they've already had a lot of legal scrutiny. So that by the time our closing documents were prepared there really wasn't much review needed from a legal standpoint in order to come to agreement. There could've been some negotiation points, again, between me and the buyer. But from a legal point of view the documents were pretty tight to begin with.
Jeff: So you had a lot of confidence going in whenever you receive these documents that all the details were absolutely final and ironclad from a legal perspective. Did you ever meet with anyone from Morgan & Westfield and face-to-face? Was that even necessary?
Ed: No, I never met with anybody from Morgan & Westfield face-to-face and it wasn't necessary. We did all our correspondence by email and phone conversation, and that worked out just fine.
Jeff: It had to work out fine that you didn't have to hope into a car and drive some place. And you were able to do everything, take care of everything right there in the office or wherever it was that you were. Ed Ketchoyian is with us. He is the former owner of a PuroClean franchise business in Sterling, Virginia.
PuroClean, for people who don't know, is a home and business water damage and fire damage restoration services company and they have offices from coast to coast. If you could tell us Ed in just the few minutes that we have left, maybe offer some advice and maybe discuss with us some of the challenges or maybe the most challenging part of this process of selling your business that you will take with you to maybe your next business wherever it is that that might be or whatever it is that you choose to do.
Ed: As far as the process is concerned I think the biggest thing for me is just to have patience with the process. That's probably the advice that I would give to any other person trying to sell their business is that it's not going to happen overnight. And just keep a long view perspective on it.
In the more general sense I like to look at the whole experience of owning a business and selling a business as just one more business and life experience that I can take with me to whatever I'm going to be doing in the future. All of our life experiences end up benefiting us at some point in the future.
Jeff: This is interesting. So the way you're talking about it you're talking about owning a business. In general terms, and certainly with regard to PuroClean here in this particular instance it also just kind of boils down to basically just a step in life's journey for you anyway. That's kind of how you look at it isn't it?
Ed: That is how I look at it. Sometimes it's difficult to do, and I think sometimes for a small business owner as well is to realize your identity is not your business and you're a separate person. And sometimes people feel that their sell value is tied to what it is that they're doing for a living. It's good to keep that perspective and be able to separate.
Jeff: I do want to ask you about your separation from your company and in kind of those final days or weeks in the transition or as the transition was going from the time that you stepped away, to the new owner of your franchise. What was it like working with your employees and the people on your staff?
I'm assuming obviously there was the need to keep things pretty quiet in order to make sure that the sale would go through and that services and work within your organization would go on as usual. How was it for your employees to find out that you were selling the company and that they were then going to have to work for a different owner.
Ed: That was difficult. We were working with the owner for months and we couldn't reveal anything that was going on. We chose not to reveal anything that was going on to the employees. And so we were absolutely certain the deal was going to happen.
For obvious reasons if the buyer were to back out before the deal closed after we told employees there'd be instability and it would just not be a good thing. So we had to wait. And in this case we had to wait until less than a week before the closing date to inform everybody. Everybody was very surprised. Shocked is a strong word but they really had no idea that we were in the process of selling.
There's a lot of uncertainty and people wondering how it affects themselves and their livelihoods. And the message that we gave is the message the buyer wanted us to communicate which is that he really didn't want to change anything that was going on. The people that were there are assets in the sense of they're essential for what the owner wanted to have in place. People weren't going to lose their jobs or anything like that. That was really important to try to get across. Change in general is not a welcome thing.
I never met with anybody from Morgan & Westfield face-to-face and it wasn't necessary. We did all our correspondence by email and phone conversation, and that worked out just fine.
Jeff: No, it's not by anybody at any level. And particularly when you have employees who are used to working for a boss and everything seems to be going along very smoothly. And then all of a sudden you find out there are changes at the top and you've got somebody else new coming in. I can understand that. And I think that we've all been there to a certain degree Ed.
I am interested in knowing what you did or what role you played in the transition from one owner to the next. Were you asked to provide some guidance and consultation to the new owner coming in?
Ed: Yeah, sure. As part of the deal itself I stayed on for 30 days to help with training the new owner. And then it was important to the new owner that stay beyond that or an additional two months to help transfer my institutional knowledge over to them. And also just to maintain business continuity with the business and our relationships with partners and customers out there. I'm actually still there and still working as a contractor toward the next couple of months.
Jeff: That is now but obviously an evergreen program. This'll be heard by people well down the line. Looking back let's pretend maybe it's six months or a year after having sold your business and your two-month stay period, the transition period is over. How do you feel about how the overall process worked selling your business, getting it ready to sell and in selling your company, and moving on into other chapters starting new chapters of your life. Looking back at it, you're happy with the way things went? Are there things that you would've done differently? Just give us your final thoughts there.
Ed: Sure. I'm very happy with the way things went and I'm not sure what I would do differently honestly because I have a clear conscience. I don't have any special wisdom to add here at this time.
Jeff: You are definitely in the top 1% because there are so many other people that we've talked to who've had things to say about different things that they might have a little bit differently in order to maybe make things smoother or what have you. But you definitely do sound like you're very clear on that key point.
I guess the real final thought here as I have some seconds left on the program in order to wrap up. If you could give one piece of advice to a business owner who is planning to sell his company and maybe it's not necessarily tomorrow, or next year, or even two years from now, but they do have it in their mind to sell their company at some point and that they plan on building their business for the purpose of selling it. Having gone through the process of selling your own business what piece of advice would you give?
Ed: I'm going to go back to something I said before. It's the patience thing. It's a business situation, it's a business transaction and try to approach it that way. And, again, try to maintain as much patience as possible as you're going through it. Valuing your company can also be an emotional thing as well, obviously.
And I think the important thing here is that as you go through the process there are certain things that may or may not happen in terms of say, if a buyer shows up and they say or demand some things that may seem totally unreasonable, or might be in some ways even insulting depending on how you want to take it. You just have to keep your eyes on the prize so to speak and keep your eye on the goal that you want to accomplish.
If your goal is to sell your company at a price that you're happy with you have to be able to move beyond little bumps on the road that might distract you from getting there.
Jeff: Really simple words of advice from Ed Ketchoyian, patience in looking at it as just kind of a business deal or scenario not to be taken personally, one to be taken certainly very seriously for sure but all the more reason that we need to have that patience and be able to rest on that. Ed Ketchoyian, such a pleasure to chat with you my friend. All the best of luck to you in the future and congratulations on the successful sale of your business.
Ed: Thanks Jeff. Good talking to you.
Jeff: Good talking to you too, sir. Thank you so much. That's Ed Ketchoyian, now the former owner of a PuroClean franchise, Sterling, Virginia has been our guest to kind of share his thoughts and his perspective having just gone through the business transaction process.
"Deal Talk" is brought to you by Morgan & Westfield, nationwide leader in business sales and appraisals. Learn more at morganandwestfield.com or by calling 888-693-7834. Again, 888-693-7834. For Ed Ketchoyian, I'm Jeff Allen. Thanks again for listening to "Deal Talk." Until next time, here's to your success.
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