3 Tips to Deal with Emotion in Business

Usually when we talk about M&A deals, we like to talk about numbers.

Not today. We’re going to talk about something most business owners don’t like to talk about… feelings.

Because numbers are the easy part. Emotions are what can kill a deal.

Is Business Really Personal?

I recently had a meeting with a prospective business owner who was purchasing an existing business from a retiring owner. She was talking about the drama and complexity surrounding the acquisition.

One day the retiring owner would be responsive, the next day combative, the next unreachable. 

For the purchaser, this was a transaction — the numbers were agreed upon, the close date was set, yet the actual close seemed so far away, with all the due diligence required. 

I reminded her of the conversation we had when she started the journey of acquiring the business: “The numbers are the easy part. The emotion will derail the deal if not dealt with appropriately.” That hit home.

How to Deal with Emotion in a Business Transaction

Business is personal. Even for the most stoic among us.

When it comes to dealing with emotion in a business deal, I’ve found these three tips to be helpful.

1. Address It Head On

When I represent an acquirer or seller, we always sit down with the target or buyer to get to know each other. That means forming a relationship — the other party is a human, by the way. We are dealing with their baby: something that they have developed, nurtured, and, quite frankly, probably spent more time with than their actual kids.

Talk openly about the five stages of grief. Set up a process when engaging the other party — talk about the emotion and listen. The time spent up front will make the whole process smoother.

2. Be Patient

Don’t expect to breeze through the deal. Some people process faster than others… some don’t.

Build time within the timeline to handle the emotion. Be flexible, so the party can cope with the changes happening. This may result in a dropped deal or a delay in close — that’s okay. If that happens, we have options.

3. Understand the Big Picture

I encourage business owners to treat their businesses like an investment, rather than their baby. Focus on the priorities in this world: family, faith, friends. Invest in people you trust to help you grow the business and sustain it. This allows the owner to disengage more easily when the time comes to sell.

The most important attribute you can display is listening. The proper dose of listening will take you from origination to close — with a successful transaction.

Are you considering or going through an M&A yourself? I hope you find these tips helpful. I’ll share some more next month.

In the meantime, please reach out to me if you’d like any 1:1 help.