Selling your business is something you might only ever do once. Careful planning and preparation will, of course, be key but you should never underestimate the importance of your team – not only to help you get a third party sale across the line, but also their importance to the purchaser. That purchaser could be the team itself.
Here are our top things to consider when it comes to your team and your succession plan:
- The Sale Process
First off let’s think about the practicalities involved in selling your business. If your business is small and reliant on key team members it is inconceivable that you would be able to sell without their support. Trust takes a long time to build and if they sense your anxiety or stress at any time during the process (and have not been bought into your confidence) they may well respond to that message on LinkedIn from a head hunter.
- The Buyer
So someone comes knocking at your door and gives you a decent price for your business. Will the buyer look after your team? Will they maintain your current premises or close everything down with the objective of absorbing your current contracts into their own established team and premises? Culture is key to the successful integration of two businesses and, if the buyer isn’t aligned with your values, employees may leave which may, in turn, cause your customers to leave. If your deal has an earn-out element this could put you (and your money!) at risk. When you start your conversations (even the very preliminary ones with a potential buyer) you need to be very sure that your team will fully support a sale. The buyer will likely want to lock you and your team into a deal with a significant earn out component.
- Your Team
If you decide to go ahead with a sale you need to be satisfied that your interests and those of your key team members are the same. Share incentives can be a great way to motivate your team to help you sell the business as they too will be cashing in on the sale. The buyer is also looking at making this deal appealing to your team as much, if not more so, than to you.
The simple truth is that you need to be very sure that interests and those of your key team members are looked after at an early stage.
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