Tip 10 of 12
Would I be willing to stay on if the buyer wants me to?
Sometimes you can seal a deal by agreeing to stay on in a consulting role for a period of six months. But first, you need to determine whether it’s worth it to you. If you’re willing to stay on, it might reduce the risk to the buyer and increase the value of the company, Siposs says.
You’ve just sold your business, but are you hitting the golf course or returning to work on Monday? Many business owners sell their companies only to find themselves back in the office as a consultant or working through the transition period. The decision whether to remain with the company will be contingent on a number of factors, some of which center on the nature of the business and the need to train the new owner and his or her staff. Other factors are personal. Two primary reasons for staying on are:
To enhance the sale. If the business is complex and requires a significant degree of training or relationship-building with vendors, clients, and other key individuals, you can increase the value of the sale by agreeing to stay on and help train and assist the new owners. This can be full-time, part-time, or as a consultant, depending on what is needed.
To remain busy. If you are selling a business and looking forward to retirement but wish to continue working in some capacity, ask if the new owners are willing to employ you for a period, or make that a component of the deal. You can add value to the business while staying active, doing something you enjoy.
On the other hand, you may not want to stay on. Here are some reasons why:
Wanting a fresh start. Many business owners sell because they want to walk away from the business and do something else entirely. If the buyer does not need you to help with training, you may have the opportunity to explore other areas of interest and possibly start another business.
Not fitting into the new culture. Every business has a corporate culture, and every owner has his or her way of doing things, so staying on and adapting to a new environment might not be appealing.
Often a seller stays on, wanting to remain part of the business that he or she founded, only to feel uncomfortable when the business is changing all around them. As the seller, you must realize that once the new owners take over the business will not be the same as the one you owned and ran for years. This can be very disconcerting for some former owners.
Depending on the buyer, you may be able to work out a situation that is comfortable for both sides. If you are not looking to remain with the company, you may be able to train someone in management to stay on and facilitate the transition, freeing yourself to walk away and be available only for key consulting matters. Only by factoring in the complexity of the business and your own personal goals can you set up the best exit strategy.
Answers to these and many more questions can be found in The Exit Strategy Handbook. See Chapter 9, “Management and Employees Checklist,” page 97.