Let It Go! An Awesome Song and Great Business Advice

Elsa just had a big fight with her sister, Anna. She decides to run away and live her life in exile. As she enters her icy mountain palace, she sings the now well-known song, Let It Go.* It’s one of those memorable songs …once you hear it, it’s hard to get it out of your head.

I find myself singing that song in my head when I talk with business owners who have waited too long to sell their company. It breaks my heart to see a business in decline because the owner has held on too long. Here’s the typical profile…the business took a dive during the recession of 2007-2008, but due to the grit of the owner, they held on and got back to “normal” around 2013 or 2014. Instead of selling then, after showing four or five years of growth, the business owner decides he isn’t ready and tells himself and others, “I will sell in five years.” But here’s the psychology of why they say five years. The number five sounds long enough to not have to worry about it, yet it’s a short enough timeframe to placate those who want him to sell (spouse, children, banker, etc.). To be blunt, whenever I hear an owner say “I want to sell in five years,” I assume they aren’t seriously thinking about it.

But every business owner eventually reaches a point when they have to do something. Though still reluctant, they are usually forced to sell by an external event. It might be a health crisis, a family member in trouble, or the loss of a key employee. It’s almost an immutable law of nature. Whenever an owner has held on too long, the ultimate decision to sell is forced, not thoughtfully planned.

A few months ago I was helping a business owner think through his transition options. The value of his business today is about $2.5 million, but we could have sold it for $3.5 to $4.0 million two or three years ago. The decline in value was the result of a slow, though not severe, decline in revenue, in part precipitated by a couple of competitors poaching his customers. The business owner was finally ready to sell, but I could tell he wasn’t happy about it.

I can’t solve all the world’s problems, but I wish I could help every business owner in middle Tennessee understand the concept of “letting go” at the right time. Here are three clues it might be time to let it go: 1) Have you heard “you should think about selling” from two or more people who care about you? Perhaps they see something you don’t. It might be time you let it go. 2) Has your business growth slowed, stopped or gone into decline? If you are waiting for your business to recover without a strategy to drive that recovery, it might be time you let it go. 3) Are you seeing increasing changes in customer expectations that you don’t have time or capital to address? If what worked in the past seems harder now, it might be time you let it go.

Letting go of a business you have started or run for a number of years is never easy. I don’t want to underestimate how an owner’s emotional commitment to his employees or customers can make selling difficult. But let’s be real, letting go is inevitable, one way or the other. My message to business owners is to be proactive and strategic about the timing of your decision to let it go. Doing so on your terms, not forced by external events, always results in a better outcome. Always.

*I refer to the wonderful movie, Frozen, released by The Walt Disney Company in 2013. I have been a fan of the Disney company since I was a kid, and I was privileged to hold an executive position with the company for six years. I am excited for the release of Frozen 2 scheduled in late 2019. I can’t wait to take my two grandchildren.

 

JIM CUMBEE is President of Tennessee Valley Group, Inc. a retainer-based business brokerage and transition mediation firm in Franklin, TN. Cumbee is an attorney and has an MBA from Harvard Business School. He has a wide range of corporate and entrepreneurial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee.

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Tennessee Valley Group

Jim Cumbee established Tennessee Valley Group to help business owners fulfill their dreams for life after business ownership. It’s a mission that his 30+ year career history had prepared him well for—in addition to being an attorney, transition mediator and business broker, Jim has been a buyer, seller, and entrepreneur. His broad range of experience gives him unique insight into how business buyers and sellers can achieve their goals.

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