As some of you may know, I sold my company last October. While I think I was as prepared as I could be for life after selling my business, there were still several things I wasn't prepared for.
Here's a list of the top five things I learned after selling my company. Hopefully this will help those considering selling their business and also give some comfort to anyone who has sold a business and has feelings like those listed below.
Starting a New Company Has Both Been Easy and Hard
One of my reasons for selling my company was that I thought I could more or less recreate what took me 10 years in 1 or 2 years (albeit in a completely different niche, thanks to a non-compete). I thought I could quickly recreate a catalog of products, put them on Amazon and eBay and all of a sudden I would be at the same $2million in annual revenue my previous company did. This has been partly true and partly untrue.
In the 6 months since I sold my company I've found a great niche and have developed 20 great products which achieved sales basically as soon as they got listed on Amazon or eBay. In fact, I probably underestimated how much demand still outpaces supply on Amazon – I listed products on Amazon before my products actually arrived thinking it would take a few weeks to get sales. The products sold nearly instantly and I had to cancel orders.
However, I've underestimated how much work everything has taken. The product research and development part has especially taken a lot of time but also the act of just recreating Amazon accounts, eBay accounts, etc. has been incredibly time consuming. I sympathize with all new importers and ecommerce entrepreneurs about how hard starting up is. The good news is though that I think I am proving that there is still a lot of meat on the Amazon bones.
When You Tell People You Sold Your Company Everyone Thinks You're Unemployed
One of the negatives of running your own business is that many people still understand ‘entrepreneur' to mean ‘unemployed'. So the egotistical part of me thought that if I could say “I just sold my company” it would be some measure of success for me.
People still think I am unemployed and broke. Except people view having just sold your company as even less of a measure of success than saying you run your own business (my theory is that many non-entrepreneurs see selling a business as a failure). Now when people ask me what I do, instead of telling people I just sold my company I tell them what they want to hear and say that “I'm unemployed, play FIFA all day, and live off my wife's income”.
I Never Realized the True Stress of Being an Entrepreneur
Since selling my company, I've realized how much stress was on my shoulders now that it has been removed. I still lay awake in bed from time to time regretting selling my company and wondering if I will ever be able to be successful again. BUT this doesn't even begin to compare with the stress and lost sleep I faced when I ran my company.
The absolute fear of having $300,000+ tied up in inventory and having my Amazon account shut down absolutely petrified me. This fear really grew immensely the second I found out that me and my wife were pregnant with our first child. On top of all of this, ever since I met my wife our relationship has been centered around her having the stable 9-5 job with lots of benefits with no flexibility and me having the unstable business that pays well and is extremely flexible. It terrified me having that if my business failed that status quo would be broken if I had to get a real job.
Since selling my company, my stress level is way lower and I sleep a lot better.
The Fine Print in Contracts Really Means Something
When I listed my company for sale I had the impression the sale would basically involve me being wired a bunch of money and me giving the password over for my Amazon account. Not quite this easy.
Whenever you sell a business of any size, you have to pay about $5,000 on a lawyer to draw up a contract. At one point I seriously considered drawing up my own contract. To think now that I actually considered drawing up my own contract is both hilarious and terrifying.
When we were drawing up the 11-page contract, literally 10 pages of it made zero sense to me. Since selling my company, I've referred back to it probably every week. I've referred back to the non-compete section countless times to see what I can and can't do. I've referred back to the indemnity portion to know what I'm on the hook for after the sale. And so on, and so on.
In hindsight, there's things I would probably have structured differently now but I don't think I would ever known to fight back on them until after I sold my first company.
$1 millon Really Isn't That Much Money (Especially after taxes and in Vancouver)
I sold my company for USD867,000. This worked out to about $1.15 million in Canadian dollars thanks to a terrible exchange rate. However, after I paid off some outstanding debts and taxes, this was less than $800,000 CAD and I still have a bunch of personal income tax to deal with, depending on how I decide to take the money out of the company.
This would be fine except that house prices in Vancouver have risen nearly 40% since I listed my company for sale in early 2016. A 3-bedroom condo is now approaching $1.5 million. Someone who bought a home in January 2016 in Vancouver and simply sold it today would have made almost as much money as I did from selling the company I poured 10 years of my life into. Literally, within a week of selling my company I felt pressure to recreate to start another business and recreate another business simply in order to keep my head above water.
All in all, I am still very content with the decision to sell my company. The one thing that didn't make my top 5 is that I never anticipated how much fun it would be to free my mind of a multimillion-dollar business and pursue other things. Along with my new ecommerce company, I also have some expansion plans in the works for this blog. Without selling my company, I would have never had the time to pursue these new ventures.
If you have ever sold a company, is there anything you wish you would have known? Or are you considering selling your company but are afraid of the unknown? Feel free to comment below.