Avoid Seller Let Down

The “Let Down” is commonly a reflexive response to imminent success of a stated objective.

Recently, in an NBA playoff series between the Los Angeles Clippers and the Houston Rockets , Houston defied the odds by winning the last three games to take the series 4 games to 3.  The pivotal game was game 6 when Houston, down by 19 points with 14:30 remaining, outscored Los Angeles 49 – 18.

The final and deciding game 7 was anticlimactic.  Houston won on Los Angeles’ home court.

Game. Set. Match.  Penthouse for the Rockets; Outhouse for the Clippers.

And therein is a “Let Down”.

Business sellers are susceptible to the same dynamic.  Having resolved to sell and exit the business, and in some cases having progressed to negotiations and due diligence, many business owners prematurely visualize success.  They figuratively break out the champagne while the game still rages on.

They let down.

Sales efforts or service levels decline, the physical appearances of the facility and equipment atrophy, employee morale wanes, etc. The balance sheet and income statement predictably reflect the let down and the buyer’s optimistic view of future earnings becomes clouded.

The solution to this potential pitfall can be attributed to “It aint over til it’s over”, a common expression that owes its origins to:  (1) Kate Smith singing “God Bless America” at a 1969 Philadelphia Flyers Hockey Game, or more likely,  (2) the 10 minute solo sung by Brunnhilde in the closing act of Wagner’s fourteen hour Ring Cycle Opera.  It is a helpful mantra worth repeating throughout the stages of a business sale transaction. It will sustain the spirit and propel the daily work ethic. “Aint over” means eliminating non-performing assets that take up space, maintaining inventories that will sustain or grow sales, adding to the customer base, collecting on aged receivables, and keeping one’s head in the game.

Enterprise value, business marketability and buyer enthusiasm will be maintained and often elevated when the seller continues to operate at a high level. Play it out to the very end, avoid “let down”, and when it’s over and done, there is plenty of time to celebrate . . . off the court.