7 Things You Didn’t Expect When Selling Your Software Company
You have worked hard to grow and develop your software company. Perhaps your success has attracted some attention; or maybe you are feeling that it’s time to move on. One way or the other, selling is on your radar.
Of course, you’re ready for this next step.
But there are several things you probably didn’t expect – unforeseen factors that could affect you and the acquisition process.
1. Potential Buyers Generally do their Due Diligence
Initially, it felt like you were close to a deal. But the due diligence process is taking longer than anticipated.
Due diligence is more than just opening the company’s books – it’s about determining if your company is the right fit for the buyer. They will look at your operations, structure, and any legal considerations in addition to your financials.
Be prepared for a lengthy due diligence process. People want certainty. It’s not uncommon for them to make a series of requests before feeling confident.
2. It Will Take a Lot of Hard Work – More than You Expected
It has taken serious sacrifice –the building, planning, delivering results – to get to this point.
So now you can just sign the papers and relax, right? Not really. Selling the business involves hard work from both parties. Enter the process with this in mind and clear the decks for some serious work ahead.
Your emotional reaction may also come as a surprise. For so long you’ve thought about the end-game, you just assumed you would enjoy the process. Go easy on yourself – it’s natural to have mixed emotions about giving up your work.
3. The Process Will Take Longer Than You Expect
The process usually begins with the initial discussions followed by the valuations, due diligence, further discussions, proposals, counter-proposals, financial review and payment schedules – all moving toward the final sale.
This process cannot be completed in a single phone call. Be prepared to work through a lengthy process and continue delivering results along the way.
4. There Will be Fear in the Workplace
Don’t assume that just because you haven’t made a formal announcement, your employees don’t sense that something is happening. Employees can be highly skilled at detecting potential changes within their workplace.
Staff anxiety may hurt productivity or stir rumours that hurt your competitiveness. Always maintain a calming presence. During this transition, your leadership is more important than ever.
5. You Can't Take Your Eye Off the Ball
Your core business has been your key to growth, and continued performance has made people interested in your company.
Now that a sale is under discussion, that performance must continue. A drop in performance could derail the entire process, so don’t get distracted by the negotiations.
6. Buyers will be Skeptical of Your Numbers
You have an idea of how your company should be valued, but your buyers may see things differently. That’s a natural part of business.
Don’t be discouraged by their skepticism. If your numbers are realistic and accurate, then the proper deal will present itself.
7. You May Have Seller's Remorse
When the sale is done, you may feel a twinge of doubt. That’s normal. It’s important to remember that the sale was your end-game all along.
When the opportunity presented itself, you were ready, and you made sure your company was properly valued. It may be hard to give up control, but in time you will know that you did the right thing.
Your Turn
Are you preparing to sell your software company? Have you encountered challenges along the way that you didn’t anticipate? What lessons have you learned? Share your thoughts and questions on LinkedIn, Twitter, or Facebook, and don’t forget to share this post if you found it useful.