Surprises to Watch Out for When Selling a Business

By Mike McCarron
Published: May 22, 2019 | Last updated: March 21, 2024
Key Takeaways

Here are some issues you may face when it’s time to sell your company. Prepare yourself and don’t make these mistakes!


Getting stung by one of the Dreaded Ds—Divorce, Death, Disability, or Dork partner—can be very painful. Any one of these unforeseen events can be the catalyst that forces you to sell your business.


Even if you’re smart enough to plan for every eventuality, selling your business is going to be full of surprises. (Read also: The One Secret Ingredient for a Successful Exit.)

Here are things that caught me off-guard on my maiden M&A voyage.


Not All Cash

You won’t get cash for your business. Deals can be structured countless ways and 100 percent cash is no longer one of them. Earnouts, holdbacks and stocks are some of the ways buyers try to skin the cat.

Speaking of cash, all that money in the bank is not yours; it’s your company’s. It’s called cash flow. Determining the amount of 'extra' cash that ends up in your jeans is the last and often most difficult part of any negotiation.

Stiff Competition

The day the ink is dry on the sales agreement is the day your non-compete kicks in. You’ll be limited to three options: retire, work for the purchaser or buy a franchise. No one is going to buy your business and let you work for a company that remotely competes with the one you just sold.


A five-year non-comp doesn’t sound like a big deal, but wait until you start paying all of your expenses with after-tax nickels. When you walk away, your ability to earn an income in your industry becomes severely impaired.

Looking Over Itsy-bitsy

After months of intense negotiations, the LOI is finally signed. It’s almost time for your long-awaited drive on Easy Street.


Minor problem: your company has not been bought yet.

LOI stands for “letter of intent”, a non-binding document that only sets the parameters of the deal. It begins the due diligence phase of the transaction, where the burden falls on you to prove the minutia.

During due diligence, you have three jobs: selling the company, running it and explaining to everyone what is going on. The buyer has the trump cards and watches you like a hawk. Losing a big customer during due diligence will cost you serious coin at closing. There’s a reason why only one out of every three results in a sale.

What’s Up, Doc?

Confidentially is critical in any negotiation. It’s easy to keep a lid on things early in the process, and virtually impossible once the LOI is signed and the dark suits start parading through reception. Once you start involving third parties, you might as well burn the NDAs. So plan for the inevitable. You don’t want to be doing the Curly shuffle when your biggest customer calls to discuss the rumor she’s hearing from Joe Competitor.

Sales Amnesia

Every successful entrepreneur can sell. It’s virtually impossible to build a business if you can’t flog a widget. When you go to sell your company, you’ll be surprised how quickly your sales savvy vanishes. Why? Because your needs become the priority.

Like any other sale you make in your career, getting the best deal for your business depends on how well you meet the needs of the customer. If you don’t understand the buyer’s needs and meet them, a deal will never get done. It can be hard to fathom that it’s not about you when a lifetime of work is at stake.

Your final surprise comes the day you walk out the front door. That’s when the postpartum depression whacks you. Instantly, there is a huge void in your life. You’re no longer 'the guy.' You have to find a new purpose when you wake up in the morning. When you sell your business, the biggest surprise may be just how difficult it is to adjust to the next phase of your life.

What do you do next? I suggest you begin by embracing the Delightful Ds: Drinking, Dancing and Doing Diddley.

Share This Article

  • Facebook
  • LinkedIn
  • Twitter

Written by Mike McCarron

Mike McCarron
Award-winning writer, Mike McCarron, was one of the founders of MSM Transportation before it was purchased in 2012. Based in Toronto, Mike is currently the president of Left Lane Associates, a company that helps C-Suites “monetize” their transportation company. He can be contacted at [email protected] or followed on Twitter @AceMcC.

Related Articles

Go back to top