The Psychology of Procrastination

Business owners attempting to map out viable exit strategies in today’s volatile and complex exit environment face daunting challenges. Dealing with tax, retirement, estate planning, and asset protection issues, not to mention finding a competent buyer, is sometimes an overwhelming experience for business owners who want to retire.

Sellers often wonder, “What do I do?”, “How do I do it?”, and “Who do I know who has already been through the process who can help me avoid making mistakes?”

If you are like most business owners contemplating an exit strategy, such questions are reflective of much deeper issues that remain unaddressed in many cases. One of the core precepts in business is: know the rules of the game and develop the critical skills and tools for creating the success you desire.

Unfortunately, however, sellers of businesses encounter problems exiting because they lack the critical skills and tools it takes to get them what they really want. They often have trouble even articulating exactly what they want to accomplish and in what manner they wish to achieve it. These unexpressed desires create a cloud of pain and frustration for business owners when the time comes to sell.

What happens in the human brain with respect to this phenomenon is amazing. One of the rules of neurology is that “neurons that fire together get wired together”. Learning happens and habits are built when this occurs.

Whether the learning and habits are beneficial or not is another matter. When large financial issues (such as undertaking the sale of a business) arise in one’s mind and are met by ignorance, there is a pyramid of doubt, worry, fear and frustration which causes neurological “wiring” to occur.

Business owners with intense needs have a stimulus response associated with; “the finances and the business sale (and therefore the pain) are not being taken care of.” It doesn’t take long until the neurology of these two subjects gets wired together and it becomes impossible to consider selling the business without feeling pain. This pain is pure agony and sellers can’t see a way out. For them, there’s no solution except to shut down and put it off until the second Tuesday of next week.


To further compound this problem, when a buyer enters the picture, they become layered in with the pain, and soon sellers see them as part of the problem rather than a potential solution.


Scientific studies have proven that when prospects take phone calls or meetings regarding these kinds of large financial issues, they begin feeling pain even to the point of dropping into a depressive state during discussions. The result is that sellers do not go beyond the reptilian brain into rational thinking, and the pain is holding them back from any action at all. In the reptilian brain, no thinking can take place.

Additionally, the reptilian brain, located at the base of the skull, is the furthest portion of the brain from the frontal lobe, which is where humans can actually think. In order for thoughts to move from the reptilian brain to the frontal lobe, they must traverse the limbic system or mammalian brain, another portion of the brain where no thinking can take place.

The three brain components lay against each other, but are not wired together, creating a debilitating psychological barrier to success.

There’s good news, however. Delta Business Services knows how to cure the pain and break through the psychological barriers helping you accomplish your goals painlessly and cost effectively. 96% of business exits fail because they lack a cohesive, logical plan developed by experts who know the exit process inside out and who have the tools needed to make it work.

This is what we do at Delta Business Services. We are experts at this, so we understand that it’s not about just selling your business. It’s about how you sell your business that makes all the difference.

Over the years, we have developed a few essential steps that we feel ALL business owners need to do in order to avoid making costly mistakes in their business exits. By following the steps listed below, you can create the best life for you and your heirs after you sell your business.


It begins with taking the 40,000 mile view. Spend some time thinking about what’s important to you. For most sellers, finding a competent buyer is the number one thing.

In many cases, your family may not be interested in your business, let alone have the skills to run that business. If this is the case, then finding a competent buyer is of primary concern.

Another top concern would be if you are looking to create a retirement fund and you have some worries about outliving that fund or having to alter the lifestyle to which you’ve grown accustomed.

Avoiding unnecessary taxes and preserving wealth are other top considerations for sellers, as is the desire to leave an inheritance to their heirs.

Nothing beats “doing all of your thinking on paper.” Taking the time to discuss your plan and write it down is invaluable. But, this goes way beyond merely talking with advisors.

This is the next chapter of your life. You are building a new identity as a successful seller of a business. You have to make it a vision — a picture in your mind with sound, feeling and words on it. It must be crystal clear.

Your plan also needs to be practical. If it’s practical, it’s actionable. The steps need to be logical and within reach. The pieces of the puzzle need to fit neatly together. This is what makes a plan executable.


For many business sellers, trying to sell their businesses is like running with a pair of scissors in the dark. They simply don’t know where they are going and are afraid they are going to fall and hurt themselves.

However, when you know the rules and know what to do, your chances of success go way up. Here are just a few areas in which knowing the rules can pay off big time.

A. Income Tax — Having income funneled through a corporate entity rather than as an individual can be a huge savings. There’s a reason, after all, that rich people usually choose to incorporate. When you owe less in taxes, you pay less in taxes. You can still take your “ya-ya” expenses pre-tax. Having a corporation in retirement is a game changer.

B. Capital Gains Tax — Knowing the rules around deferring capital gains (and therefore capital gains taxes) can prove to be a huge windfall. The installment sales method is one such strategy. The 1031 exchange is another. Stepped-up basis rules are yet a third.

C. Estate Tax — Do you know what the current estate tax threshold is? How about the rules regarding “squashing”, “splitting”, or “shifting”? Are you aware of the various structures available to you for setting up your heirs and controlling their inheritance if need be?

Regardless of your situation, having a solid command of the rules gives you maximum flexibility.


I can’t stress this one enough. Too many times, sellers get all wrapped up in trying to get a high enough price in all cash for their business to fund their retirement, only to find that they’ve priced themselves out of the market, and never sell their business.

They rarely consider that their business can become their retirement if the deal is structured properly. A traditional business sale structure incurs heavy tax consequences for unwary sellers, which only puts more pressure on needed investment returns for retirement. Retirees needing secure income are then forced into riskier investments. Talk about shooting yourself in the foot!

With so many retirement plans taking a beating from market swings, why would anyone want to have their nest egg tied up in securities? CDs pay little to nothing. (we call them “certificates of depreciation” around my office). By the time inflation and taxes have had their way with you; you may very well wind up with a negative return on your money. The same can be said for bonds. Stocks and mutual funds are a sucker’s game.

“They’re looking in the wrong place!” – Indiana Jones

Shift your focus from the front end of the transaction to the back end. By placing the emphasis on maximizing the back-end after tax cash flow (which is the rich man’s formula); many pitfalls can be avoided altogether.


It’s one of the great secrets of the rich. Use a corporation (or multiple corporate entities) to convert your “ya-ya” (personal expenses) to corporate expenses, thereby minimizing your taxes and better insulating yourself from potential litigation. Firewalling, equity stripping, and being set up properly in corporations are a game changer for your retirement. You can effectively live a $500,000 a year lifestyle on $250,000!

Want still more benefits? Use a favorable corporation state like Nevada or Wyoming. They’re tax-friendly and give better protection. Corporate services in these states will be happy to advise you properly given your circumstances, set you up the right way, and help you execute a wonderful strategy for tax savings and asset protection. All for much less than you think.


It’s true. In order for you to have the best life after selling your business, being committed to your buyer’s success is critical. Take the time to get to know your buyer during the acquisitions process. Business sales are not like selling cars or real estate.

The deal isn’t done when you see the customer’s tail lights or the keys cross the table.These relationships go on for years as you are still a valuable advisor to the new owner. The rapport you build in the acquisitions process sets the tone for the remainder of your retirement.

Do you want to be happy and worry-free? Instead of the traditional “push against each other” negotiation, try a different approach. Once you’ve agreed on the critical points, get behind the buyer’s deal and the both of you push together in the same direction to get it to the finish line! This is the right way to do acquisitions, and it fosters loads of goodwill for your future benefit.

Unforeseeable obstacles, detours, road blocks, pot holes, and hazards of all kinds inevitably pop up on a buyer’s path to success. Being there for a new owner when he runs up against such challenges will pay big dividends in the future.

Be that reassuring and friendly voice on the phone when your successor needs key advice to guide him through a maze of industry challenges.


Are you covered? Do you have the right kind of coverage in the right amounts?

I know insurance can be somewhat perplexing. It comes in a lot of flavors such as “term”, “whole life,” or “universal life.” And there are other questions to which you need to know the answers, such as “How do I hold the policies?” “ Is an irrevocable life insurance trust a good move?” What about long-term care and end-of-life coverage?

Having executed several estates, I can tell you that insurance is a very nice thing to have. Insurance proceeds can create instant cash estates for your beneficiaries. Such proceeds are non-taxable to them and they can use the money to pay off debt, fund college educations, pay medical bills, fix up their homes, etc.


Sounds crazy doesn’t it? Not so to Alfred Nobel, the man who invented dynamite and created the Nobel Prizes. Nobel actually came up with the idea of using his money for these annual prizes after his brother, Ludvig died and a French newspaper erroneously reported that it was Alfred himself who passed. Nobel’s obituary was published with a headline proclaiming, “The merchant of death is dead!” One of the obituary passages read:

“Dr. Alfred Nobel, who became rich by finding ways to kill more people faster than ever before, died yesterday.”

Alfred didn’t want to be remembered that way. He wrote his own obituary, one of which he could be proud, and he left the world a legacy of peace and achievement in the form of his prizes.

Sitting down and drafting your own obituary might sound strange, but it makes perfect sense. When it comes to leaving a legacy, how you’ll be remembered will be according to how you have lived. The obituary you write becomes the life you create. How do you want to be remembered? For Alfred Nobel, this question was the driving force behind how he finished his life, and how he is remembered in the world.

Here’s a hint to writing your own obituary — If it makes you weep uncontrollably, you’ve got it.


You probably guessed this one. The infamous “Bucket List” is the quintessential standard for living out the rest of your life.

What experiences do you want to have?

What places do you want to visit?

Where do you want to live?

What special activities do you want to do?

All of this and more can comprise your list to give you the strong finish to the fulfilling life you want, and were destined to have. I hope these tips have helped you better formulate your exit plan. After all, you have invested your life taking care of your business and you deserve a successful exit. Now let your business take care of you. Your business is still the best investment there is.

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