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Want to Sell Your Business Someday? This Personal Detail Is More Important Than You Think.

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When we help clients sell their businesses, we teach them that there are four pillars involved in a successful sale: risk, growth, transferability and documentation. These four factors are what buyers dig into before making a decision to buy your business. From my perspective, however, there’s a fifth pillar and it often carries more weight than any of those mentioned above, despite not appearing anywhere on your profit and loss statements.

The fifth pillar is you: the owner of the business. I've seen it time and time again in the hundreds of exits I've guided entrepreneurs through: Founder behavior can single-handedly determine whether the sale of their business sinks or swims or if a multiple gets pushed up or down. When the buyer trusts you as a person, you may be able to command a higher multiple on your valuation, and this can translate to hundreds of thousands or even millions more dollars in your pocket.

Buyers look at your past behavior as a clue to how the business has grown. A recent example of what not to do is Adam Neumann, former founder and CEO of WeWork. Neumann’s relentless drive pushed the company’s value to a mind-bogglingly high number, yet this same behavior was so toxic it led to a cratered attempt at an IPO in 2019. (If the S-1 paperwork for your IPO filing requires 10 pages on risk factors related to your own behavior,........

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