Selling Your Business Can Have an Emotional Cost.

HOWARD Sherman, CEO of Roundhouse Inc., was rushing to pick up his daughter, Annabella, from preschool when an e-mail message flashed on his computer screen: "The deal is done -- the funds are flowing."

"There was no place for my emotions to go," recalled Sherman. "Seven years of brutal work had led me to this moment."

Having built Roundhouse, a Los Angeles maker and designer of CD storage products, into a $40 million success story, Sherman and his team opted to sell out to Targus, a major manufacturer of computer carrying cases. Terms of the deal were not disclosed, although Roundhouse received a combination of stock and cash.

Still in shock at the finality of what he had done, Sherman called his wife, actress Sela Ward, but could not speak. He hung up, drove to a coffee shop, bought a cup of coffee and called her back from the car.

"It was a very strange time for me," said Sherman. "I had gone through eight months of misery, dealing with the financial people, my management team and our backers. I hated life. I wondered, why are we selling when sales are up and things are so good?"

At one point, when an initial investor was fighting the sale and Sherman was ready to back away, his investment banker called him with this blunt message: "'You make frigging CD cases, Howard,' he told me," said Sherman. "'You guys didn't change the world.'"

But every entrepreneur knows that your business is your world. And selling your business radically changes your life. The emotions associated with letting go are deep and powerful. You have to deal with relinquishing power and responsibility. You have to report to the home office and be accountable to a new layer of upper management.

Day to day, operations are supposed to remain the same; Sherman and his top managers signed. three-year employment contracts, but fundamentally they have changed. They all work for a very big company now.

"There were three reasons we bought Roundhouse," said John Sargent, vice president of communications for Targus USA, based in Anaheim. "Products, customers and design."

Sargent said Targus employees joke that the company makes computer cases in two colors: "black and dark black."

"We wanted to expand our thinking and reach younger computer users with a line of modern, sexy different colors," said Sargent. "We also liked their management team. They are good guys."

Jane Applegate is the author of "201 Great Ideas for Your Small Business," and is founder of ApplegateWay.com, a multimedia Web site for busy entrepreneurs.