Recently, Petra Coach presented a webinar, The Emotional Side of Selling a Small Business with Jamison West.
Purchase your copy of Jamison’s book, “The Emotional Side of Selling a Small Business” HERE.
You can find the full recording below.
Tell us a little about your background.
- 25+ years in IT services industry
- Started company in 1995 in Seattle
- Owned for 21 years
- Acquired 4 other companies starting in 2010
- What he calls, “the good, the bad and the ugly”
- Sold in 2016, when the company got to a point of strong revenue and profit (and also he was exhausted)
- Was prepared from a financial perspective, but realized he was not emotionally prepared
- Resources were plentiful on the actual sale, but what he couldn’t find was any help around things like: how and when to you talk to your team or how to figure out what’s next –those were complicated issues and he didn’t feel well-prepared for
- Eventually had successful exit
How is the book formatted?
- The first 2/3 is a realistic fable loosely based around what he went through
- The last 1/3 is a compilation of 6 case studies from people who also went through exits, talking about one critical, disruptive, emotional moment from their exit and recommendations for how it could’ve been avoided or mitigated
What made you choose those specific people for case studies?
- Similarly: everyone had emotional challenges
- Uniquely: they highlight things that he did not experience
- People were open, honest, transparent
- Each case study will resonate in different ways with different people, so it’s not just a fable
Why now? Why is this book relevant?
- Started doing conferences and speaking engagements, where eventually his peers encouraged him to document his experience
- In 2019, he publicly agreed to write a book
- Someone did a case study on him – similar to the ones in his book – and that was the inspiration he needed to get started
- That person helped him translate his experience in a book
- Being at home during Covid was a good time to do it
- We’re going through an evolution in tech, and there’s a lot of acquisitions happening and selling of small businesses
With everything that’s been going on the past few years economically, how is the book relevant?
- While some people were negatively affected during this time, a lot of businesses weren’t – they were able to pivot and thrive
- There were things like PPP loans that helped them make moves to be in a more desirable position
- And now they want to mitigate risk
- There is a lot of money out there right now which seems to be applying to the valuation of businesses
- All of those things tactically make sense, but that doesn’t change the fact that emotions still play a major role and a resource for that is needed
What are some key moments during buying/selling that were the most emotionally challenging for you?
- Always was an “open door” transparent leader, but once you put it out there that you’re was ready to sell, you can’t go announce it to your whole company that “maybe you’re selling in a few months if all works out”
- That was a real challenge to his personal integrity – withholding that information instead of being forthright and upfront with his team
- Had to close the door sometimes because he had calls or emails that were now private
- Had to freeze on big moves like hiring or new initiatives and think about what the potential buyer wants
- His team was looking at him like, “What is going on?”
- Eventually he made the decision to start bringing in his key leaders
- Announced the sale to the full team 2 weeks before it closed.
What are some ways you were able to take care of your team and uphold your integrity while making the sale?
- You can’t promise everyone they’re going to have a job after the sale, because that almost never happens
- Held a lot of 1-on-1 discussions, especially with employees in more vulnerable positions
- Couldn’t just be the “guy everyone likes” anymore – he had to deal with conflict
- He selected the buyer, not because it was the strongest offer financially, but because their culture felt so much like his, their integrity was high and that was important to him – maintaining the legacy of the company and employees
- Helped put at-risk employees in touch with contacts to help them find their next role without taking a step backwards
Hindsight 20/20, what could you have done differently that maybe would’ve prevented the roadblocks you hit?
- It really comes down to clarity on what’s important to you and how you’re going to set it up
- He didn’t have his leadership team aligned to the outcome, which is something he would’ve done differently
- The culture piece is especially important in acquisitions
- If you acquire companies with vastly different cultures, it can be extremely difficult and you can lose some of your people
- This is one of the greatest unforeseen challenges
Are there any purchases/sales/acquisitions you’d consider more of a failure?
- Yes – went through 3 acquisitions quickly and aggressively, and didn’t go deep enough on some of the due diligence as they should
- His last acquisition had unearned revenue that wasn’t on the books, and the money wasn’t there
- This resulted in an inability to bill clients and nearly lost him the company
What have you learned in the process of underpaying yourself?
- Believes in paying yourself a fair wage, but if you can live with $100K less a year and invest that back in the business – stepping back and looking at it rationally – could you double that ROI?
- It’s basically investing in yourself anyway
What are the key things you hope readers get out of your book?
- See around as many curves that potentially could happen as possible and learn how to mitigate those circumstances
- Keep that list of non-negotiables, so when things get emotional you don’t lose sight of what’s most important
What are some of the best resources other than your book?
- Books around value of your company (industry specific)
- HBR article
- Peer groups (for him, this is EO) – they understand what your family, friends, etc. may not because they’re not in the same position you are
- Business coaching/therapy
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