a monkey-wrench into the planning — sometimes tanking a deal altogether — Lehman and Mashuda share. An owner’s very identity is inextricably tethered to the business that they poured their heart, soul, time, energy, money, and faith into; and that makes the sale of said business a highly and undeniably emotional undertaking, however unanticipated those feelings might be. Failure to confront doubts and misgivings early on can undermine a deal in the works, or even cause it to collapse, the financial pros warn. “Once you start this process, there’s a cadence that you follow through with,” Mashuda explains. “If you’re not emotionally ready, you’re going to break the cadence,” which then creates questions from the prospective buyer’s perspective. And once that trust is broken, Mashuda says it’s gone forever. “It might be a great buyer — the best fit for you, the company, and the community,” he adds, “but second thoughts and secondguessing will ruin the deal.” ’Tells’ of an Emotional Seller Lehman and Mashuda, who specialize in multi-generational wealth transition, have learned to recognize the signs that a seller is headed for an emotional brick wall and is in danger of backpedaling. They propose that: If the thought of waking up tomorrow morning with no calls to make or return, no meetings to attend, and no decisions to make causes anxiety and feeds feelings of irrelevancy, you might not be emotionally ready. If you have to think twice about whether to accept an offer that’s $10 million over fair market value but demands that you separate wholly and immediately from the company, you might not be emotionally ready. And if you view the potential sale of your company as a transfer not just of wealth but of the value you provide and if the thought of retiring invokes feelings of guilt and betrayal as a result, you might not be emotionally ready.
To save yourself from the vertigo, the advisors agree, it’s imperative that the vision for a sale is in harmony with family goals and considerations. As much back-and-forth might take place with candidate buyers, they agree that ironing out details with one’s spouse (if applicable) is non-negotiable. “Make sure there’s alignment on the life plan,” Lehman urges, wisecracking that a wife may have taken vows for better or worse but “didn’t sign up for [her husband] to be at home from 9-5!” It’s not really a joke to be taken lightly, though, he and Mashuda note, underscoring how the family piece deserves just as much weight as the liquidity part of the equation. Family, in fact, is the purpose of one’s wealth, they contend. After all, you can’t take it with you. This article is based on Lehman and Mashuda’s session, “From Founder to Future: Navigating the Transition of Your Business With Purpose + Precision,” presented on November 6 at the NAFCD + NBMDA Annual Convention in Chicago. Denise Williams is the Editorial Senior Manager at the North American Building Material Distribution Association.
"Second thoughts and secondguessing will ruin the deal."
Making Peace With Your Plans Make no mistake, Lehman and Mashuda emphasize, you need to plan ahead and give yourself time to get emotionally ready. They estimate that 80% of mid-market companies — the bucket category where many distributors land — will experience some kind of liquidity event; and wealth management companies often don’t get involved until after that activity occurs. But Lehman and Mashuda contend that proactive planning beats reactive response every time. If you’re not emotionally ready by the time an investment banker or wealth manager comes into the frame, they caution, you’re already in for a roller coaster ride.
S U R F A C E & PA N E L • D I S T R I B U T I O N M AT T E R S 2 0 2 6
159