Congratulations! You and your buyer have successfully navigated your way through the process, and have closed the sale.
Now what? Well, for one thing, you’re not quite done yet. Prior-owner involvement post-sale can mean the difference between success and failure for the new owner(s).
That’s one reason to consider staying involved for at least a couple of months after the sale is accomplished. All the more important if your sale involves installment payments, and you haven’t realized the full price at the time of closing.
Don’t forget that the new owner comes into a steep learning curve, however well prepared on paper. Every business is unique, and yours is new to them. You want them to succeed – help them through the transition.
If you are the lynchpin in the operation of your business, you might want to consider potential tiers of residual involvement:
- Tier 1: Two to three months of full-time involvement. First, you might want to let the new owner shadow you in order to pick up on the details of the role s/he is stepping into. Then, gradually, transition him or her into their new responsibilities.
- Tier 2: Part-time involvement, so that you are available to the new owner as s/he gets the feel of the business, your team, your customers.
- Tier 3: Consultation – either scheduled or as-needed. Make sure this is not too open-ended, though. You do need to leave the business in the good hands you’ve chosen. Life awaits!
Some things you can and should ensure, so far as possible:
- That your team is comfortable with the sale and has met the new owner. Again, we note, so far as possible, because we can’t really control their comfort, at the end of the day – we can only reassure them, so far as we can also be truthful.
- That your customers also know about the sale, and are, again, as comfortable as you can make them with it. Meet with your top clients, along with the new owner, and assure them that the new management is as committed as you have always been to providing the highest level of customer service.
When might you not need to stay on? Well, if, and only if:
- You have ensured the above two points;
- You are handing over a business which runs like a clock without your active participation; your key management, apart from yourself (preferably one or more of whom has been with the business for an extended period, for institutional memory), is staying on, all processes and procedures are thoroughly documented; and
- The new owner does not feel the need for your continued contribution.
In most cases, though, you will be a great asset to your buyer in their transition into the business which was yours for so long – and most buyers will want that advantage.
You can also consider this a final, farewell gift to the business you spent much of your life building, running, nurturing.
If you are considering a transition out of your business, please call our Transaction Advisors, or click here to email us directly – we are here to help you.
Until next time –