There’s something about the ten-year mark that makes one pause and look inward. I’m not sure the exact day I set foot in the M&A industry. Perhaps it was the day in 2005, when Chris and I started talking about selling our own business. Or maybe it was the day in 2006, when our business actually sold. According to LinkedIn it was January 27, 2007, the day we incorporated Allan Taylor & Co.

Regardless of the day itself, there’s no doubt I’ve been immersed in the business-for-sale industry for over ten years now. As such, this seems like a good time to take stock and share a few observations from a decade in M&A:

The 4-letter word most business owners ignore

Everyone wants to know the trick to successfully selling a business, or executing well on any exit strategy for that matter. Is it assembling a team of whip-smart advisors, creating a business model with huge margins, building a bulletproof org chart?

Those things are great, to be sure, but the secret to successfully selling a business is actually pretty boring: Plan.

The longer I’m in the M&A industry, the harder I try to catch people as early as possible to discuss a potential sale of their business. Last year Allan Taylor sold two businesses for owners we had met four years prior. Those two transactions went about as smooth as silk. While there were still a few bumps in the road, they never came close to the dreaded “deal turbulence” we all try to avoid. One owner said he thought the process would be harder than it was. We assured him that it could have been much more difficult, except for the fact that we’d been working together for four years to make sure it wasn’t.

There are studies that claim business owners spend more time planning their next vacation than planning an exit from their business. We get it. Chris and I didn’t plan the way we could have when we sold our business in 2006. You just don’t think about it…until you’re ready to think about it.

The reality is that you need to think about — and plan for — selling your business a minimum of six to twenty-four months ahead of time.

Alas, something tells me I will still be beating the “plan early” drum ten years from now.

The real reason deals die

I’ve seen countless articles over the years listing the many reasons why deals fail to close. It’s always the same cast of characters: disagreement on valuation, sloppy financials and record-keeping, too much inherent risk in some aspect of the business.

I recently ran across an answer that comes closer to the truth. One seasoned M&A advisor correctly stated that there is only one reason deals die: mismanaged expectations.

While I whole-heartedly agree with that sentiment, I’d add my own twist and say this: Deals die for lack of self-awareness.

The “issue” that causes a deal to die is rarely (if ever) the real issue. It’s often a smokescreen for something else, something that has nothing to do with numbers and everything to do with the frailties of human nature. These can include guilt and resignation over raising entitled children, bruised egos, fear of the unknown and existential questioning of one’s identity.

It’s easy to brush these things off as “soft” issues. The first time someone cried in my office I was shocked. I mean, who would have thought that M&A and Kleenex would go hand in hand?

I quickly learned that selling a business is a highly emotional event for most people, and the human element needs to be embraced early on in the process. If you don’t believe me, just take a look at the number of firms popping up that offer help aimed specifically at the emotional and psychological hurdles associated business exits.

The most successful business owners I’ve met — at any stage of the game — are extremely self-aware. They know what parts of the selling process are going to be the most painful for them, and those around them. They face reality head-on and aren’t afraid to make difficult decisions. These aren’t just owners, they are leaders, and a real inspiration when you get to see them in action.

Forget timing. Be ready.

Selling a business is like having a baby: If you wait for “the perfect time” you will never do it. You may get lucky and sell at the perfect moment, although you will only know it was the perfect time in hindsight.

If you wait until the perfect moment arrives, you will either a) never sell your business, or b) miss your window of opportunity. According to Basil Peters, most owners fall into the latter category and ride the wave too long.

The best that you can do as a business owner is sell when you and your business are both ready. Strive for a simple, three-part formula for deciding when to sell:

  1. You are ready to leave your business, financially and emotionally.
  2. Your business is ready for a sale.
  3. The overall economy is good.

That’s it. No magic. When you can put a check in the “ready” box for these three factors, go ahead and pull the trigger.

“The definition of genius is taking the complex and making it simple.” — Albert Einstein

My first ten years in M&A have been quite a ride. Most of it has been a fascinating and rewarding adventure, (although I could have done without the added exhilaration of the Great Recession).

As I embark on my second decade as an M&A advisor, I look forward to sharing my knowledge and doing my best to make a complex endeavor as straightforward as possible. If there’s one thing I’ve learned it is this: When you peel back the layers, it’s often the simple things — like planning, self-awareness and being ready — that can make the biggest difference.

Ready to start planning for the sale of your business? Let’s start the conversation today.

Continue the conversation on LinkedIn.

Author: Barbara Taylor

Barbara is co-founder of Allan Taylor & Co. and a former New York Times blogger. She has been a small-business owner since 2003. Barbara lives with her husband, Chris, and their two sons in Northwest Arkansas.