Alex Wolf Alex Wolf

5 Things I Wish I Knew Before I Sold My Business

Before you make a move you’ll regret, read this. 

Before you make a move you’ll regret, read this. 

Owning or running a business you don’t want anymore is more stressful than it sounds. 


Sure, businesses aren’t people, but they feel like living, breathing responsibilities in our lives. 


Most people can’t empathize with what it feels like to have an obligation to this thing that isn’t technically alive, but nonetheless has a very real pulse to the people, such as your customers, employees, and your reputation that all depend on it. 


Because so many people depend on it, it makes it harder to focus on you and your needs. You might hear yourself asking:


“How is this business going to fit in with what I want to do next?”

“Is there a way I can get rid of it without causing too much disruption?”

“How am I going to get rid of this thing?”


If this is you, keep reading.


I know to the outside world, you’re the boss so everyone thinks you should feel lucky that they show up for you. 


It hasn’t occurred to them that things have changed and these days …eh…they should feel lucky you show up for them! 


Don’t worry, I’ll keep that between us. ;) 


The truth is, you like the idea of getting out and moving on to the next thing, you just want to cause as little disruption as possible while doing it.


But each solution you think of involves putting people out of their jobs or leaving your long-time customers and suppliers high and dry.


So you feel stuck. 


You know you’re stuck when you’re asking questions like: 


How Would I Replace My Income? 

How Do I Find A Buyer Who Won’t Ruin Everything? 

What About My Team? Will They Be Okay? 

How Do I Even Know If Anyone Is Going To Want To Buy This? 


These questions are stressful.


I know because I was in your situation. 


Before I sold my first company I wasn’t sure how I was going to make a smooth exit and I was terrified of making a wrong decision. 


We’re talking about people’s lives here (including yours)... as well as lots of money. 


You’re not crazy. This can turn into a disaster if you don’t know what you’re doing.


Many people don’t and it causes damages that can take years to clean up. Years you’d probably rather be spending relaxing or doing something you love.


So before you make any moves, I hope this article can work as a helpful resource so you avoid any pitfalls! 


It’s been 8 years since I built and sold my first company and I’m grateful to share since then I’ve gone from being a newbie at selling a business to now helping dozens of transitioning business owners like yourself sell their business with as little bumps as possible so they can move on to the next chapter in their life with peace of mind. 


It’s safe to say that I’ve seen a lot, so before you get your hands dirty… 


Here are the top 5 things I wish I knew before I sold my first business. 


#1 I wish I knew how important it is to sell it to someone who really cares about it. 

I’m going to be honest with you, I got lucky! The buyer of my first company was a person who really understood the vision of the company and cared about keeping that intact after I was gone. 


Were there things that looked or even felt a bit different after I left? Sure, but that’s to be expected. You can’t expect everything to be 100% the same as when you were there but if the new owner can keep at least 70% of it the same then consider that a huge, HUGE success. 


With that being said, I have seen some horror stories and I wish more business owners knew how much who they sell their business to impacts their customers, staff and legacy forever. 


Sometimes business owners sell to a buyer just because they offer more money or hand a business off without fully understanding plans or the values of the new owner.


It’s a sad sight.


Your customers are left dumbfounded. Your employees feel betrayed and a few bad yelp reviews later, that beautiful vacation you have planned doesn’t match with the ugly guilt on your conscience.  


If the thought of your business becoming unrecognizable the second you turn your back is a fear of yours then keep reading. 


The key to avoid this is to know what to expect from different kinds of buyers. We’re not all equal and we’re not all in it for the same thing. 


For example, most big investment banks and private equity firms only have the capacity to interpret your business as a few pieces of paper.


Whoever is put in charge is usually from a finance background and most likely has no experience building or running a business at all.


This doesn't make them bad people, it’s just the nature of their job to be more focused on the numbers and less on the people. 


Most Private Equity: 

  • Interprets your business as a few sheets of paper

  • Usually has zero experience in running a business 

  • Tends to put profits over people 

  • Will beef up sales first and ask questions later 

  • Keeps you in the dark about what they plan to do with your business after you hand over the keys


This means when it comes to quality assurance they’ll probably try bloating sales first and clean up any damages later.


Depending on what industry you’re in or what your unique customers expect, this can be a disaster for the long-term health of the business and ultimately spoil your years of hard work.


Strategic Buyers

Strategic buyers are called strategic buyers for a reason. They’re looking to buy your company to fit into their overall strategy for a pre-existing consortium you might know nothing about. Again, this doesn’t make them bad people, it’s just the type of buyer they are.


You can expect them to: 

  • Change the name and brand of your business 

  • Fire a lot of your staff and replace them with their staff (new accountant, lawyer, consultants etc.) 

  • Roll your business up into a pre-existing franchise


If these things don’t affect how you feel about selling your business then one of those options might work for you. Plenty of business owners sell to private equity firms and strategic buyers all the time. The only issue is, they don’t always know what they’re signing up for and how it has a long term effect on their customers, employees and legacy overall. 


However, if you’re looking for a more sympathetic, high-quality acquirer who actually cares about your wishes after you sell, you can spot them out based on the following attributes:



A buyer who cares about your business: 

  • They have some level of experience in entrepreneurship (not just finance). 

  • They care about the deal being structured in a way that compliments your future financial goals. 

  • They don’t mind spending time on the phone with you to answer your questions. 

  • They’ll want to keep your employees, customers, suppliers and your businesses overall local community impact. 

  • They will do their best to maintain your businesses integrity. 


Since these sympathetic buyers really care about structuring a deal that compliments your personal financial goals, you should have a clear idea of how the deal could provide your life the most possible value. 


Do you want cash flow after you sell? 

Do you want to put some of that money away for your kids or grandkids? Travel? 

Do you have a large expense like medical bills? A Wedding? 

Do you just want to make sure you want to retire in a way that’s comfortable for you? 

Do your best to communicate these goals to this buyer so they can best serve you. You don’t have to get too personal but providing enough detail in a way that can help serve you will ensure you walk away with a deal you’re satisfied with.


# 2 I wish I kept these 3 financial documents on me at all times. 

Let’s be honest, entrepreneurs are good at making money, not organizing it.

In fact, it’s a misconception that entrepreneurs are “good with numbers”.


We’re usually good at sales or managing people which is psychological, not mathematical. 


Ask any entrepreneur and they’ll tell you, there’s no simple equation for dealing with employees!


So that means when it’s time to talk numbers, they wince. 

In fact, the most common response a business owner has to the question “What was your bottom line?” is “I don’t know”. 

So if this is you, consider yourself normal. 


The good news is it’s okay! No matter how uneasy you feel about your bookkeeping, if you know the business is making money then even the most unorganized books can get cleaned up and work in your favor! Yes! Even yours!


And by the way if you need help with your books, we can help. Contact us here


I wish I knew how much easier having access to these three specific financial statements would make it for me to sell my business.


Think of them as wings you can use to fly free when you feel like it.


If you don’t have these specific statements well then, I hate to say it but you might as well be handcuffed to your business forever.

Take it from me, it’s better to get them in order sooner than later. 


Prepare these statements in one neat folder on your computer and update them accordingly:

  • P&L statements for the past 3 years (more than 3 years will be even better)

  • Balance sheet (assets, liabilities and shareholder’s equity)

  • Recent Cash Flow Statement (divided by what’s being spent on operations, investments and financing)

These financials have the power to: 

  • Properly plan how to replace your income and plan for retirement when you sell

  • Make your businesses sellable

  • Show you how much money each employee is making for the business and if they’re worth keeping on 


If you ever want to sell your business or grow with acquisitions, these are the first things a potential buyer or investor is going to ask for to begin their due diligence process so it’s worth it to have them handy. 


Not having these prepared wasted so much time and impacted my ability to plan my financial goals. Again, if you need help getting these in order, me and my team offers free consultations here.

# 3 I wish I knew that business brokers can kill a deal 

Once you start looking into selling your business, you might come across business brokers who make some strong claims about how they can sell your business for a high price and fast! 


But, keep an eye out. 

I’m not saying this always happens but most of the time, the entrepreneurs we speak with who’ve worked with business brokers were told their business was worth 2 even 3 times more than what it’s actually worth. 


This can be devastating for entrepreneurs who have been planning or making real lifestyle changes and even promises to family and loved ones that they won’t be able to keep under the misguided advice. 


In fact, the inflated valuations a lot of business brokers tote in front of business owners typically slow down the deal by months, even years (that’s considering it sells at all). 


The reality is only 1 out of 11 businesses actually sell after being on brokers sites for a year, and it’s not like odds are that great after that either.


Chances only go up as little as 10% for the second year. Do you really have that kind of time? 

The truth is, if your business doesn’t sell it’s not the end of the world to them because they have a rolodex of other businesses they can replace you with.


In fact, my team has dealt with brokers who are so lackadaisical about our attempt to contact them, they got away with ignoring calls and messages from us for months without the business owner knowing! 


Business brokers are just like any other brokers in the sense that their livelihood is dependent on their commission.


They usually have zero operational business experience. What happens to you and your business after the sale is none of their business. 


Don’t get me wrong, I’m not saying involving brokers are completely useless when selling a business, but if you involve them too early, you could potentially stifle and extend the sale of your business for months or even never, when you don’t have to!  


Before you involve a broker, make sure you spent 6-12 months doing the following thoroughly: 

  • Tell your friends and family you are looking for a serious buyer.

  • Consider asking one of your key employees if they’re interested in owning the company. If they need help with financing, you can have them reach out to us here

  • Book a call with a serious buyer to see if they’re the right fit and ask questions. Most serious buyers should be willing to be reasonably generous with their time and resources. I’m always available to speak with business owners with these things.

  • Make a post on Linkedin or social media about how your business is looking for a new owner.

  • Go to local industry events and network with people, being sure to tell them your business is looking for new owners. 


# 4  I really wish I knew what an SOP was. 

Standard operations process (or SOPs) is just a fancy term for documented processes that make sure your services and products are delivered consistently every time to a standard of your liking. 


I wish I knew about them before because the last thing you want after you sell your business is still have to spend 3-6 months, or even an entire year, training and replacing staff because they’re clinging on to you for dear life and looking to you for answers about everything. 


In fact, even if you don’t sell your business right away, you’ll be shocked at how much SOPs can transform the productivity of your business regardless.

Most of the time business owners can’t walk away from their businesses simply because the information needed to run their business (up to their standard) is in their head and not written down! 


It’s okay. We all do it. It’s not just you. This is why SOPs are a God send! 

The reason why having an SOP is so important when trying to make your business succeed even after you're gone is because it makes it possible for you to:

  1. Easily to sell your business without compromising the quality of the systems your business uses to run.

  2. Help you not worry as much about your employees because it’ll allow them to successfully manage quality standard operations without you.

  3. Not stress about training any new hires because you’ll already have a system you can depend on to maintain company integrity and smooth transitions. 


Keep in mind SOPs don’t guarantee superior performance each and every time. However, they do ensure you have a structured quality system in place that improves productivity, reduces costs, qualifies employees and creates a motivating company culture all without you needing to be there. 

The right SOP is not only a gift to you but it’s also truly a gift to the staff and customers who depend on you and your quality of service because it serves all of them without you being there. 


Plus, you’ll learn a lot about yourself in the process because you’ll see exactly how your ideas clash with other people’s understanding.


The reality is, people can’t see what’s inside your head and sometimes as entrepreneurs, we don’t realize how true that is until we write it all out. 


Draft a small SOP on your phone today and start testing it now. Use it to see how long your staff can go without you.


When the process breaks and they have to call you, identify what caused it and patch it with some new information to prevent it happening again. Keep doing that until eventually they can ride the bike without training wheels! 

# 5 I wish I knew more about tax exposure after a sale. 

Replacing your cash flow after a sale is a real concern for many business owners. How can you make sure that transition happens smoothly?


And what are the real financial and legal limitations when it comes to selling your business?


The last thing you want is to get 30%, 40% or even 50% of your sale profits eaten up by taxes before you even get to touch it!


I wish I knew more about the savvy ways to protect my after-sale profits through tax brackets so I could properly protect my cash and not be exposed to any hefty tax liabilities I wasn’t aware of. 


It can get complex because each circumstance is different but here are the key pieces of information you should know: 

  • Selling an S-corp or LLC is very possible but you might run into some red tape. For example, an S-corp is technically a personal entity which means when you die, it “dies”. This can cause some complications when wealth planning for trusts, wills, etc.


  • By forming or transferring your business into a C-Corp you could sell it for up to $10M tax free. As of the publication of this article, Section 1202, a C-corp behaves as a tax shelter under certain qualifications such as owning it for at least 5 years.


  • It is possible to do a 1031 exchange on your business as well as real estate. A lot of people don’t know this but you can use the value of a business to purchase another “like-kind” entity. Unlike a traditional 1031 exchange the Form 8824 must be completed with the IRS, but it’s very possible for you to protect your assets from unnecessary tax exposure this way.


As you can see, there’s quite a few pitfalls even the most careful people could fall into when selling a business but I’m hoping after reading this, you feel more confident about what things to look out for. 

If you or anyone you know is interested in selling their business we offer free consultations to transitioning business owners who want to sell successfully and with peace of mind. Feel free to contact us here.

Good luck on your journey!

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Alex Wolf Alex Wolf

Are Millennials The ‘Dumbest Generation’?

In this episode I explore some of the critique made about our generation while we were still in adolescence and how some of it in hindsight might have been terrifying and undeniably true.

Today millennials are old news, but there was a time when our behavior and online activity was on everyone's mind and the world had a lot of opinions about what kind of people we would turn out to be. In this episode I explore some of the critique made about our generation while we were still in adolescence and how some of it in hindsight might have been terrifying and undeniably true.

This episode is for you if:

  • You care about how the comprehension gaps between you and your younger siblings or children will impact your relationship and ability to protect them.

  • You want to hear the funny and sad statistics about how literacy rates declined right in front of our eyes and the internet took over.

  • You want a better understanding of how "generations" actually form and how that's connected to tech-philosophy.

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Alex Wolf Alex Wolf

Individualism is Toxic For Millennials (And Everyone)

I used to be an “individualist”. Which meant that I was annoyed by the pressures and generalizations assumed on me as a “collective”. I hated being clumped. It never felt right.

You are not an individual. When I force my “message” down into a sentence, that’s what it is. I used to be an “individualist”. Which meant that I was annoyed by the pressures and generalizations assumed on me as a “collective”. I hated being clumped. It never felt right to be categorized by my race or my gender. Being clumped by my age is something I allowed because I guess that is the dimension I do feel closest to you in. We have been subjected to the same blast of technology and through that, I really can relate. 

But my life and my family is so untraditional that it was never right for me to clump. Individualism gave me intellectual space to exist with you all with no strings attached. At least in my mind. Ayn Rand said “The smallest minority is the individual” and it made perfect sense. 

But my beef with modern technology turns out to be deeply rooted in the fact that individualist perspective is what we build our software out of. We assume that our connection to each other is optional, a matter of choice. 

A couple years ago, after a talk I gave about social media, a gentleman told me he would avoid dating the superficial archetype of influencer who is engrossed in her phone. He said he can just choose to ignore her. “She has nothing to do with me.”

She has everything to do with him. 

Just because we remove our presence from someone doesn’t mean they’ve been removed from our sphere of influence. The truth is, even if this gentlemen never spoke to a superficial LA social media star a day in his life, her presence will still influence his everyday life. 

Her presence influences what kinds of jobs are available. It influences how he will be sized up in the dating market. It will influence the clothes on the rack at his local H&M. It will influence his stock portfolio. It will influence the music and the TV shows he watches. It will influence his little sisters and brothers. It will influence how his mother and his elders are perceived and valued at their jobs. RIP Donda. It will influence how his value is perceived. 

And I don’t want to just pick on the LA, social media chick. We all echo our psyche. But the point is we echo in a web, not in an isolated chamber. When one person moves on this web, the whole web moves. You don’t get to choose and declare this web “doesn’t affect me”. You only get to bask in that illusion. But not for long. Sooner or later you’ll feel it crawl up your leg and won’t know what to do about it. Your culture has gotten out of hand because your culture doesn’t know it’s a part of a whole body. 

I want to say “humans need other humans” but you know this. We know we are a “social species”. We know it intellectually. But philosophically and technologically we don’t live like it. We keep trying to squeeze together using separatists technology. We keep trying to create community with a bunch of little shitty profiles. I keep watching silicon valley smash glass together thinking eventually it’ll create a beautiful sculpture when in actuality there are shards and blood all over the  floor. The desperate attempts to make us feel closer through individualist technology only makes us feel more fragmented. 

People don’t just merely “need” other people. People literally come out of other people. We are related. It appears as if we are separate but there are plenty of emotions, dependences and straight up DNA that proves a human is not really just one person. A homo sapien might be one person but a human is really more like 3-50 people. I mean, it takes two people for you to even get here and at least one of them to keep you alive. Then you need more of them to teach you the basics. You also need an economy of them so you can be able to trade goods/services to have the basics. You’ll want a few to spend spare time with. I mean since you’re here you might as well go fishing or have lunch with a select few you like. Sooner or later you’ll probably get an urge to get one to make a family with and boop— look at that, suddenly you’re making your own. And you’re entirely, one way or the other, interdependent on all of them. 

If you were really an “individual” then when a loved one died you’d feel nothing. But when a loved one does die, part of you dies. Without your loved ones, what are you? Nothing. Are you still human or are you a shell of a human? You’d be human with missing parts. The missing parts would be other people you have a connection with. Trying to feel alive as an individual is not going to cut it. Even if you are physically alone you will still need a butterfly or a book to make this whole shebang feel worth it.

What saddens me is the human species has built-in for you a lot of rich experiences and resources with others but we’ve abandoned them. Typically the access to the wisdom of your elders is part of the program. You usually got that along with the sheer joy of watching youth live out their innocence in full bloom. These are communal, cultural  phenomena that energized you. Sure, all life has its ups and downs but at least you didn’t feel like it was just little old you free falling into a dark pit. The economy wasn’t as complicated and abstract. The fruits were red because they were genetically ripe not genetically raped. The point is, man’s search for meaning is way shorter when he understands he is the son, the father and the grandpa. 

It’s easier to feel human when one step feels like it is taken by three feet, not one foot. The extra weight grounds your sway. They indicate your movement moves everyone. This species is not meant for you to take a wobbly step into the unknown darkness of life alone. The presence of your elders and juniors in your step were there keep you focused, inspired, confident. Sure, this weight can feel like a burden sometimes. Some men have daydreamed what it would be like to cut these extra feet off and go run free. To hell with grandpa and the baby. What about me? 

Well, what about you? To have some individual time is one thing but to have an individualistic culture is not human nature. If you think carrying three feet is a burden try feeling the weight of the world by yourself. You’ll quickly realize those extra feet weren’t dragging you at all. They were distributing the weight of the cosmic load. 

The human is not an individual. 

The individual is not human. 

The human is a clump of people who make the cosmic load worth carrying.  

What we are today is a clump of “individuals” who don’t realize or understand that we are moving each other. The body of humanity has forgotten its feet are connected. They are going opposite directions and that’s why you feel torn apart. 

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Alex Wolf Alex Wolf

How Will You Measure Your Life?

In this week's episode, I break down how we became such an "out-put"-obsessed culture. There’s a difference between using life for life and using life for death.

What makes life worth living?

Especially in today's tech-obsessed world...

In this week's episode, I break down how we became such an "out-put"-obsessed culture. There’s a difference between using life for life and using life for death and I share why it might be worth to enjoy life's pleasantries without explaining yourself.

What does this mean?

This episode is for you if:

  • You want to see what else besides "goals" you can focus on to make a good life.

  • You don’t feel as ambitious and title-obsessed as your peers and family.

  • You feel like you need permission to pick up a paint brush, instrument or any new creative hobby but you feel like you have to explain yourself just to start.

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The Art of Life Alex Wolf The Art of Life Alex Wolf

Dignity — A Value We’re Losing

I'm under the impression that unless your values are written out somewhere that's easily accessible, you'll forget them over and over again.

I'm under the impression that unless your values are written out somewhere that's easily accessible, you'll forget them over and over again.

Values = what makes you feel life is worth living.

You would think the behaviors, people and decisions that make you feel life is worth living would be something impossible to forget, but the reality is the media climate has become so inundated with distractions most people have literally forgotten what the hell they're doing here.

When your values fall into the dark, so does the alignment in your life and things quickly start to feel meaningless and off-beat.

Suddenly life becomes an experience you have to "stomach" instead of a rush of miracles that pass through your skin.

Some days it can literally feel like an enemy created your schedule.

But this whole time it was you.

Not only is **what is most important to you** easy to forget, but it can change so quickly!!

When was the last time you wrote out the 4-5 top things that make you feel your life is worth living?

Where's the paper?

Unless you read it every few days, it's trash. I hope you know that.

The way I avoid becoming a media slave is by checking in on my values every few days.

If not, it'll only be a week or two before I'm pursuing a whole other person's life.

For example last week I checked in and I had a whole wake-up call about why I decided to spend the past four years talking about tech-philosophy.

Dignity.

That word alone means nothing because we smoosh it next to:

"integrity", "boundaries", "connection", "community", "generational wealth' "Inclusivity". "values".

Some of us even have the nerve to use these words interchangeably!

People try to fit as many of these feel-goods into one sentence.

Why?

Because modern people have figured out the best way to hide the fact they don't know what these words mean individually is to make them seem like they all mean the one thing they care about:

"I know big words."

"I know powerful words."

"I know the words that make the twitter sermon go purr."

Yeah you do.

And I am so impressed.

But this doesn't help my brothers and sisters who actually want to feel life up close and personal.

Instead of sprinkling these words around for cheap emotional comfort, I like to dissect them one at a time and really see how each one stands on its own.

Do they actually apply?

For example, the definition of "dignity" is: "..being worthy of honor or respect."

That's different than "integrity" which means: "the state of being whole and undivided."

Integrity comes from "integration".

The way I like to think about it is like DNA or mitochondria.

If you cut your body down to the cell, there will still be some of the same biological data in each cell.

Your DNA is integrated down to the cell.

So someone with "integrity" is some one who "keeps that same energy" so-to-speak, in each part of who or where they are.

But back to dignity.

All I wish for you is a grandmas love.

What I mean is, the reason why tech-philosophy is so important to me is because I want you to experience your dignity.

Your dignity is directly correlated to your human experience.

It's your permission to have flesh, grace...emotional receptors that can pick up and read the miracles of kindness, innocence and the purity of humanity when they do happen to appear.

If you can even see them, that is.  

It's the juicy peace you feel in the sounds of fading laughter.

The bounce in a child's curl.

The firmness in a grandfathers embrace.

It's blossomed mercy, a cousin of forgiveness.

It's life saying "you're worth the gaze of a warm eye that cares about you and actually wants to see and respect your heart."

Without dignity man minimizes into a brutal creature.

Wars start not just because of the envy over resources but because if a man can't have a simple moment with fresh, hot tea and a smile, he'd rather be dead.

Dignity is to man what civilization is to our animal kingdom.

What farming is to fruit...

It is a state of internal order that relies on the cooperation of multiple roles to experience and yield the most meaningful goods mother nature has in her bra.

So much of our technology today wants you to compromise your dignity in the name of fame, clout, you name it.

Everything from how it's invented to why it's invented inherently implies you deserve no respect. No dignity.

And I just didn't want that warm feeling in your heart to get lost.

That warmth comes from a fire your ancestors worked really hard to keep glowing because they knew if that went out, the point of life would go with it.

It's was sewn in lullabies and recipes.

Superstitions, myths, stars.. and ultimately just love.

A love for yourself, your kin and your life.

I started studying tech-philosophy because I saw how many of us are not in love with life.

We feel alien to life and it's because we keep creating technology that enhances this deadly illusion that is robbing you of all your time and your dignity.

Dignity won't be a big moment.

It will be a small smile exchanged between you and a stranger... or hell, even a mutual eye roll.

It'll be a honoring your body with rest and food.

It'll be reaching for what the old lady dropped in the grocery store so she can spare the bend. 

It's not big and expansive, it's actually small-- but hot enough to make your body melt with gratitude.

There is so much dignity to be experienced, and so many opportunities for you to offer the experience for others as well.

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