Your buyer might ask you to stay on to help with a smooth transition
There’s still some work to do to ensure a smooth transition. You’ve to tell workers and partners, hand over the reins of the company and help the new owners get up to speed. Handling all this might help your business succeed after you’re gone and improve the chances you’ll be paid back any vendor financing you provided.
Follow these four tips to ensure a fantastic transition.
1. Negotiate a positive sale
The seeds of a smooth transition are planted before the transaction. The procedure begins with negotiating a clear, detailed sale agreement and finding the right buyer. The ideal buyer is someone you could work well with and who shares your vision for the business.
“When there’s good harmony with the purchaser, things have a tendency to work far better,” Kellow states. “The purchaser might see substantial value on your knowledge of the business, its customers and employees, and will likely seek a mutually beneficial arrangement to capture this value. ”
2. Plan the transition with the Purchaser
The purchaser can learn only so much during due diligence. A nicely thought-our transition plan will assist them as well as their financial partners (lenders and equity investors alike) with the transaction. The more closely you work with them to plan the hand-over, the fewer problems there’ll likely be.
3. Communicate with workers and partners
Bear in mind the emotions and pressures your workers will endure in a transition. Work with the purchaser to plan the way to reassure them. Good communication is critical. You might also need to offer incentives, like retention bonuses and stock options.
“From a buyer’s viewpoint, your workers represent lots of the value of the business,” Kellow states. “They can hold key corporate information within their own minds. Your workers need time to adjust. You don’t need to lose the top sales guy right after you pronounce the sale. You’re dealing with a living, breathing business. ”
4. Be ready to let go
The brand new owner might want you to have an official relationship with the business after the sale, like a plank or consulting position. That’s particularly common if you’re selling to an individual or monetary buyer like a private equity company. If you’re retaining minority ownership or providing financing to the purchaser, will want to understand what voice you’ll have for key decisions and what role you’ll have in the business after the sale closes.
At the exact same time, you need to be ready to go ahead. “The vendor is utilized to using all the power and often isn’t ready to relinquish that,” Kellow states. “Vendors must understand the anticipation of them during the transition, to make the transaction success and ensure their legacy carries on. ”