Lessons From A Sale 10 Years Later

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I often am asked if selling HTS, the VAR/MSP company I had for 27 years was something I would do again. In a word, the answer is a resounding YES. My answer would be the same for HTG which I sold now five years ago to ConnectWise.

It wasn’t that we hadn’t built great companies. After all, we grew from my bride and I to over 100 employees during that tenure. We were within an eyelash of generating 17M in revenue in a single year. We served thousands of small businesses in five states across the Midwest. There was a lot to be proud of given we did it headquartered in the middle of an Iowa cornfield.

So I haven’t really looked back since we sold HTS 10 years ago this week, and HTG 5 years ago this week. Would either company be worth more today given the frenzy of buyers and the sky high multiples. Maybe….or maybe not. The real issue at the time that drove the sale was a loss of passion for the business on the HTS front, and a realization that HTG would require a lot more investment to grow it further.

Twenty seven years is a long time at HTS, and my role as CEO changed how my time was spent. Much less interaction with customers directly (except for problems) and far less depth of relationships with the team. Frankly, I just couldn’t do the things I enjoyed because of the need to take care of the things that only a CEO can do, and a lot of those weren’t much fun.

I had convinced myself that the stress was under control and I was managing it pretty well. It wasn’t until we sold, and my family said there was a significant change, that my eyes really were opened to just how much the company was taking a toll on me. So I haven’t looked back, and poured my focus into HTG and since the transition to ConnectWise, now Evolve helping partners avoid some of the mistakes I had to learn the hard way.

So ten years later, almost to the day, what have I learned? I shared my thoughts on my daily email blast earlier this week. (to join the list go to this link or email [email protected] and ask to be added) Here’s my list as I reflect on that:?

1. There is life after you transition out of your business. As business owners and leaders, our identity gets totally intertwined with the business we lead. And while separating from it is difficult, there is life on the other side. I was fortunate to have HTG to focus on, along with a few other sideline activities that were happening. But as I prepare to transition again at the end of 2023, I’m being more intentional about the next chapter. Some of it will hopefully continue – facilitation and mentoring peers – but it’s important to plan for the next chapter of life before you arrive at that point.?
2. Once you sign the documents, you have to let go. Looking at where my former company is today, it is easy to wish things had gone differently. It’s half the size it was at time of sale, and many of the team we had in place at transaction are no longer there. But spending time on ‘what if’ or wishing things would have gone differently doesn’t change things and only drags one down. You have to let go and pour your energy into what’s next. I tried to hang on too long being concerned about what was happening even when I had no way of influencing direction.?
3. There is a lot more to life than money. Money can’t buy happiness or make you happy. Fulfillment comes from living with purpose. That’s part of the problem with item #1 above – when you transition you can lose purpose, especially if you haven’t thought about it before the transaction. Confusing what makes life meaningful with chasing money is a path to an unhappy and unfulfilling life.?
4. Relationships change when the business transitions. The people you are used to seeing every day are no longer around you in the same way. It can become lonely very quickly if you aren’t intentional about building relationships with people that will become your new patch going forward. As much as you want to believe the relationships you have had will just continue in the same way, they won’t without ongoing intentional effort to maintain them.?
5. Business ownership has perks that vanish at time of transition. While I realized this was coming, and we attempted to run the business like we might sell it on any given day, there were still plenty of ‘little things’ that all of a sudden became expenses that came out of my personal account versus the business account. Plan accordingly because the flow of money changes.?
6. Communicate with the family about the transition. While you may be the center of the change, those around you in your immediate patch will feel the impact. Some of it can be good – in my case they told me I was less stressed and more relaxed. But in other ways the frustration and emotion comes flooding out on them, often at strange and unexpected times, and it will be different than they’ve experienced from you before. Make sure they understand some of your reactions are not directed at them, even though they may be the recipient of it.?
7. Know your number and be sure it is enough. There is not nearly as many dollars left post transaction as you might think. After taxes and fees and a lot of little (or big) expenses you didn’t plan for, the pile dwindles quickly. I’ve exited three companies in the last 10 years and hadn’t done the math in a detailed way to understand what would truly flow into my bank account. We did ok, but I’m still working for a reason. I see these outcomes from owners post transaction:

A. They don’t work any longer.

B. They work because they want to.

C. They work because they need to.

D. They work because they have to.

Outcome B seems to be the most satisfying in the list from my observation. Spend time with financial planners to know the number you need and do the math to be sure you will get there.

8. Managing wealth is more work than working. It’s a continual responsibility that becomes a job once the transaction is done. Have a plan before you have a pile of money. Take into consideration the fluctuation that happens in the market and global economy we are part of and don’t spend all your time stressing about what is happening. Leverage professionals to help with this task.?

9. Recognize the disruption you will likely be to your family. For many years, often decades, we’ve been absent from the day to day and home management as we have poured our time and energy into our company. All of a sudden, we try to insert ourselves into what has been running very smoothly without us and it creates tension and disruption. We need to step back and realize that while we got married for better or worse, we didn’t necessarily get married for breakfast, lunch and dinner every day. We need to stay out of the business of trying to insert ourselves in managing the home and leave that to those who have done it well in our absence.

10. Prepare to feel a bit lost.?I started the list with this topic, and I’ll end here as well. This is a major change in your world. It’s an emotional roller coaster that you will not be completely prepared for. You will feel emotions that you’ve not experienced in some time, maybe ever. Engage with peers that are on the same journey. It’s why we started S2S (Success to Significance) peer groups. Don’t take the transition journey alone. It’s new and uncharted territory. Get involved with others that you can learn from and share your experiences with. (More info at www.s2sgroups.com)

So there you have it. Some lessons I have learned, and are still learning, from selling a business now 10 years later. I’d do it again but be a bit more prepared and engage with peers more quickly. Pretending you have it all under control is the wrong response. Admit you have no clue – you’ve never don’t this before – and leverage the wisdom of others to help you identify and adapt to the next chapter.

Those of you who have made the transition likely can add to my list in the comments below!