According to the Exit Planning Institute, 76 percent of business owners who sold their businesses regretted selling within a year.
That’s tough to read.
Less than one in four business owners come out of their sale without regret.
You might assume most of these regrets are financial. While some certainly are, there are a range of regrets that sellers experience both during the sales process and after the fact.
In this week’s newsletter, you’ll learn some of the most common seller regrets, and some strategies to avoid them.
We’ll cover:
- 3 insights into what sellers wish they had done differently
- 2 frameworks to help you think beyond the transaction
- 1 action step to prepare for what’s next
3 Insights About Seller Regret
1. Lack of preparation is a major regret
“I wish I had prepared earlier” is one of the most common regrets we hear from people who have sold their business. The sales process itself often takes 9–12 months and this doesn’t include the time required to get your business to market.
Preparation alone is often enough to eliminate many of the other regrets we’ll discuss. When you prepare early, you can get your finances in order, position your business better, and find a more aligned buyer.
2. Deal terms can trigger regret
We used the phrase “terms” rather than price on purpose. You might assume that top-line value is what drives regret the most, but that’s often not the case.
Regret is most often triggered when the seller doesn’t understand the terms of the deal. Items like working capital adjustments, earnout conditions, and what role the owner plays in the next iteration of the business can cause unexpected outcomes.
3. Sellers underestimate the emotional impact of life after business.
If you’re like most sellers, you’ll only do this once in your lifetime. You’ve likely poured money, decades of your time, and some part of your identity into your business.
Letting it go, or taking a reduced role, can have a huge effect. It creates a void that many sellers aren’t prepared for. Without a clear plan for what comes next, even an exit that may look successful on paper can feel incomplete.
2 Frameworks to Avoid Regret
Buyer Matrix
Regret can come from misalignment with who is buying your business.
Here is a buyer matrix to help you understand each buyer type and what they look for in a sale:
1) Strategic Buyers: Concerned with expansion and synergy
2) Private Equity: Concerned with growth and scalability
3) Individual operators: Concerned with transferability
4) Search Fund: Focused on stability and reliable cash flow
What’s Next Planning?
Not every seller wants to walk away completely. Some want to stay involved, roll equity, or help grow the business under new ownership. Others want a clean break and a clear transition out.
Neither path is right or wrong, but the decision needs to be made before the process begins. The type of exit you want should influence everything from buyer selection to deal structure.
When this isn’t defined upfront, sellers often end up in situations that don’t match their expectations, which ultimately leads to regret.
List of Our Completed Transactions
1 Action Item This Week
Define what life looks like after the sale.
Take time to think beyond the transaction. Write down how you want to spend your time, what matters most to you, and what a successful next chapter looks like.