Sales & Acquisitions: Why I Sold

When I was asked to write an article about the challenges and emotions surrounding the sale of my company, I had some reservations. As I considered writing the article, I thought of the many difficulties I had experienced, both on the emotional side and on the business side surrounding the sale. At the same time, I looked back on the last few years I spent traveling to association meetings speaking on topics about our industry and remembered the many PCOs who came up to me following a presentation saying, "Thank you for your information, thoughts and perceptions." I hope this article benefits the many PCOs who have questions about selling their business.

As a second generation PCO, I never considered selling my company. I fully expected to die working at Jamison Pest Control, on either a full- or part-time basis. In truth, I had already begun a slowdown for myself at Jamison by planning the new leadership for the next generation. I never saw myself retiring fully. It was my plan to continue functioning in a leadership capacity or as chairman of the board, if you will. I must say here — concerning my past perceptions, beliefs and desires — that age and time does change one’s perspective and vision. At 50+, my age did play a part in my decision-making process. I found that I had a sincere desire to not push myself as hard as I had throughout the past 35 years. I realized I didn’t possess the same drive and fire as I did 35 years earlier.

There were many other life and business considerations that worked hand in hand with my age considerations that helped drive my decision to sell. These life changes that come with age and time present for most entrepreneurs an effect on their goals that most do not calculate until that experience or that time in life presents itself.

Like my business, every business experiences many periods of change including growing pains, business downturns, personnel setbacks, financial crises and marketplace evolution. Even the most committed entrepreneur is affected by these changes, and how one works through these "changing times" will be drastically different from one to the next. I have grown to understand from visiting with others who sold their companies and those who considered it that these factors, experiences and perceptions vary greatly from one person to the next. What is a life-changing experience for one will be a mere blip on the screen for another. What might be a commitment to stay and run one person’s business will be the same reason another chooses to sell theirs. It was my charge when considering to sell my life’s work to understand and put these factors into some order and to put balance into the equation that would determine my decision to sell or not to sell.

SELLING FACTORS. My first entertainment of the thought of selling the company came when three major factors boiled to the cauldron’s surface. Though not devastating or insurmountable, these factors coupled with other areas of major question, led me to think more and more about selling.

As the thought of selling began to occupy more of my quiet time, I made a conscious decision to identify these "major factors" that needed to be put on my "decision table." They needed to be wrestled with before a decision could be made to sell or not to sell.

The decision to sell one’s company is, to say the least, a life-changing experience and the weight one gives that decision must be equal to the impact the sale will have on their future. So, as I moved into that arena, I wanted to be sure my decisions were based on good, solid business sense with minimal emotion. So, I went to the task of identifying those areas I felt were of the greatest importance to the decision, my future and me. I should say here that it is tough to keep focused on the issues and not let them become clouded through this process. Keeping a balance between what is a good, sound business decision and what might seem emotionally correct is no simple task.

It is amazing how many things you begin to see wrong with your business when you make a conscious decision to evaluate it for the purpose of putting your company on the market. Even though you’ve not yet made a decision to sell, in a small way you have because now you’ve given way to that consideration. With that thought in mind, I had to be very careful not to allow "non-events" to affect my decisions. That is, not to allow small events and small problems to be larger than they actually were. I had to develop, for myself, a good set of guidelines upon which I could place values so the decision to sell or not could be tested and re-tested.

When the process began for me in earnest, some of the criteria or factors I used to formulate the basis for my decisions were: current personnel status, company finances, current and future liability, our marketplace, my age and my personal desires for the future. These, of course, were not the only factors, but I had to focus my thoughts on a basic foundation for the sale and develop a value-based judgment that I felt I could trust when it came time to make that decision. In going through the process, many of these areas became obscured by emotion and personal feelings and trying to make a good business decision without allowing emotions to outweigh good, sound business practice was no easy task.

MY FEELINGS. At 20 years of age, when I took over the management of Jamison Pest Control with five employees, I had no thought of selling and little thought of retirement. But at 50+, changes in my life, business, aging and maturity changed my perception from my early outlook, as it does in most people. But just because my drive, desires and tolerances changed that didn’t necessarily mean that my goals and plans for the future changed in equal proportion. I had to come to grips with what was to occur following the sale! This also has to be a part of the equation. It would behoove anyone who considers selling a "life’s work" to do some careful introspection and know why they are selling their company. They should also know, or at least have a plan for, what is next in their life. To sell without a plan for the future could be devastating for an entrepreneurial spirit whose life has been consumed by the day-to-day process of the running of his or her business.

When I identified the major factors or areas of consideration, I used a basic tool my CPA taught me years ago. The using of a "T" to list the pros and cons of the issues allowed me to log good and bad feelings, beliefs, concerns, etc. The use of my pen became very important! As the process evolved over the coming weeks, my thoughts became more organized. I began to see clear reasoning coming from my focused attentions. The more I used my pen the more clear the picture became. If I were to sit and ponder and not capture my thoughts on paper, I would have lost the ability to value judge "for real." Thoughts came and went, but when I logged them into my process, recaps and clear thoughts became possible and my judgment more reliable.

LOOKING FOR A BUYER. As the consideration process moved forward, I realized that no sale could be made without two parties at the table. I realized that the buyer was a big part of the decision-making process, and I now had to begin looking for a buyer. At that time, the market was in "full bloom" and buyers were plentiful. However, I quickly realized through my decision-making process that one buyer came to the surface for me. This buyer could meet my needs to make the sale a success for me. I guess the courtship could be a fun process for a seller, but for me it wasn’t. During this period, I didn’t care to have anyone know about my thoughts of selling my company or when I planned on selling it. Throughout the years, I was approached many times about selling and I had dinner with a dear friend in the industry who told me if I ever considered selling my company and I didn’t talk to him first, he would "shoot me." I guess I should publicly say I’m sorry to Harvey Massey, but one of the reasons I chose my suitor was the benefits they brought to the table for me — benefits that, frankly, could not be offered by others.

Let me say again here how the sale of a company is structured can be a reason not to sell the company. There are as many ways to sell a company as there are ways to place a value on it. The way one sells his or her company can have a devastating effect on the outcome, so a seller must do a huge amount of research in this area prior to the decision to sell. A roll-up, selling for cash and an asset transfer are just some of the terms with which one must become familiar if a good decision is to be made. Help is needed in this area! You must have a good attorney, a CPA and an industry consultant or someone who has sold his or her company with which to counsel. At this point in the process, I felt I had most of my "ducks in a row" to begin making an informed decision.

AN EMOTIONAL DECISION. As my research brought me to the point of a decision to sell, the emotions of a sale became more difficult. The changes in my life, lifestyle and day-to-day actions posed so many questions, fears and anxieties for me that my stress level went to a solid "10" on a scale of 0 to 10. For six months before and six months after the sale that level of stress was with me. I have been asked at least a hundred times, "What brought you to the decision to sell your company?" I can say without reservation that there was no single issue that brought me to the decision to sell. It was definitely a combination of issues and the interplay between those issues that made the decision. My decision-making process and accumulation of thoughts, notes and assumptions were revisited regularly to test my assessments and decisions during the process. Frankly, the decision to sell was a solid and right one for me. There was no doubt the sale was the right decision for Jamison Pest Control and me.

The actual sale process I will touch on lightly, but I will say without reservation, the negotiations, the contract and the final deal conclusions are things one must not try to accomplish alone. The sale of a business is no simple task, either from a business or emotional side for a small businessman. Without good legal and financial advice during a sale, a person could be placing himself or herself in serious jeopardy. Additionally, problems can and do occur mid-stream in a sale, and these support people become extremely important. My sale was virtually stopped — almost terminated — twice with issues that demanded hard work and compromise from both parties to achieve a resolution. Negotiations can become very difficult when emotions come to the bargaining table; hence, a seller needs help in this arena (especially when selling one’s life work).

THE COMPANY’S EMPLOYEES. Since the sale of Jamison Pest Control, many fellow PCOs have come to me with questions about long-term employees and how I dealt with them in the sale. They specifically ask, "How did your loyalty to them affect the decision-making process?" This issue for me contained many emotions. It was an issue that was tough to deal with without letting emotions rule. I also found that in the business community today, it is a non-issue for a larger business or corporation. The "valued employee" has no emotional value and the value placed on an employee by a small business vs. a larger corporation is on opposite ends of the spectrum. For me, I lived at Jamison Pest Control in both my business and personal life. Much of my social life was built around the company. As my company grew, I remember being taught a hard lesson by a valued employee: "This is a business. It is not a family or emotional relationship." That was not something I liked or wanted to hear. Another interesting perspective I came to appreciate was that even long-term, valued employees do not share in the liabilities and sleepless nights that come with the responsibilities of running a business. They have their own liabilities and problems. The long-term employee decision dilemma is not an easy one, but nonetheless, one that has to be dealt with when proceeding with a sale. It is tough for an entrepreneur to view this decision without emotion and each person who deals with this issue must find their way to balance this issue, to reconcile it with themselves before they can put the sale to bed.

The decision to sell a company of 100 people is a decision that for some holds devastation, for others a mere change in life’s path and for others benefits. One can’t make all — or even a majority — happy in such a decision. It was my decision not to reveal the sale, for all intents and purposes, until the deal was completed. The sale was not received well. It represented tremendous change for the company, and change anywhere or anytime for the most part is rejected. The purchaser expressed interest and desire to continue employment with all current employees. The new company sold its benefits and opportunities with enthusiasm. A few employees walked out on the day the sale was announced. Most employees took a "let’s wait and see" attitude, and even a few viewed the new owners with optimism.

THE AFTERMATH. Following the close of the sale and presentation of the new company, my job at Jamison Pest Control was over. During the sale, I did offer to stay on to aid in the transition for a period of two weeks as a gesture of good faith and participation. This was — without question — a mistake! I was in no way employed by the purchasers at the time, or on an ongoing basis (except by a non-compete agreement). My presence as an ex-owner who had no decision-making authority was only an antagonism to the new ownership and a place for former employees to vent anger.

The month following the sale was a time of transition from one very distinct culture to another very distinctly different culture. This transition for the most part was painful, or at least uncomfortable, for all involved. The two prevailing emotions were tears of loss, of failure and of anger. I was the focus for the anger.

During the six months following the sale, I limited contact with former staffers. Some today remain angry, hurt and disappointed, and some have moved on. With some, I will remain friends and will value those friendships forever. I would like to do the same with all, but unfortunately, that will not happen. Today, less than 30 percent of the staff on board at the time of the sale remains with the buyer. In fact, many have left the pest control industry.

Jamison Pest Control, the company, is gone. But the experiences will be mine forever. Those good experiences and bad experiences alike make up who and what I am. It is what I do with those learning experiences that will determine my happiness in the future. I am not happy about the sale from one standpoint, but from another, I am elated. No decision like this can be made without some regret, but I must say that more than a year later after the sale, this was the right decision.

For the past 35 years of my life I was dedicated to Jamison Pest Control and its success. I went to work at the same location every day for 35 years. On October 15, 1998, the sale ended a very large chapter in my life. It was a little like hitting a brick wall at 35 miles per hour! It was a pretty abrupt stop. There was and still is adjustment going on in my life, but isn’t that what goes on in our businesses every day?

My dedication has been business for 35+ years — often at the expense of my family and personal life. It is time for me to rededicate myself to things that are important to me — family, friends and personal happiness. Getting reacquainted with Don Jamison has been fun, and everyday I am getting to know more and more about the "guy." I truly do not know what is on the horizon for me. I am not in a hurry to look for it either. Most recently, I’ve begun to enjoy a different side of life I’ve not experienced. That is, the time to slow down and visit with a friend and not "do business," or go to the golf course with time to play and stick around afterward to talk about the round. I trust a business opportunity I will enjoy will present itself, and until that time, my golf game will improve, my physical condition will improve on the racquetball court and my spirit will grow and prosper, sharing and visiting with family and good friends.

My calendar has speaking dates booked in the coming months and I’ve been asked to develop some new topics on which to speak. I truly enjoy doing this, and I am looking forward to those dates and hopefully, more dates. Speaking, training and working with PCOs is still at the top of my list of "most fun things to do."

In conclusion, I will share a couple of very personal insights on the sale of a company:

1) Do your homework prior to a sale.

2) Get good and competent help to facilitate the sale.

3) Know what you want from the sale, both from the business and personal aspect.

4) Be prepared to make some tough decisions — and if you would like to visit about an impending sale, give me a call, and we can talk about it. Godspeed and good luck.