Taking the next step. You’ve built a successful business. Assembled a great team. Forged strong relationships with your customers. And now it’s time for your next move. By nature, successful business founders and owners are action-oriented, but it can be hard to take the steps necessary to prepare to sell your business.
For many owners considering a business sale, a chief concern is often the well-being of the team that played a critical role in the business’s success. What will become of them and their families? Will they feel resentful or betrayed by the decision to sell?
Here are some actions that you can take to achieve positive outcomes for your employees post-sale:
Identify the Team Members Who are Most Critical: While you want to protect all team members, make sure to highlight those who are most critical. Buyers need to know who plays a key role in your organization and how. When giving an overview of the business, point out which roles create the most value. Engage with the buyer in a discussion of how they can ensure they will retain those players. Typically, key employees can include salespeople or account managers who manage relationships with customers, software engineers or subject matter experts who have a deep understanding of the product being sold, or operations staff who are responsible for keeping the business running efficiently.
Position Employees as a Key Asset: When you are communicating with transaction advisers, lawyers and prospective buyers, explain how your employees are a key asset of the business and critical to its ongoing success. Include a discussion of employees in the presentations you use with prospective buyers, making sure to highlight how they drive revenue and customer retention.
Include Employee-Friendly Language in the Transaction Agreement: The agreement that you will sign when you sell your business offers an opportunity to protect employees in various ways. For example, you might be able to get a prospective buyer to agree that they won’t change employees’ pay or lay anyone off for a specified period. Similarly, a buyer might be willing to agree to offer severance to any employees who do get laid off. What you can negotiate will depends on a variety of factors, so you should work with your transaction advisers and legal team to understand the options available to you.
Want to discuss further? Barrington Wealth Management and Strategic Talent Resources are at your service.
This material is provided by Barrington Wealth Management and written by Rob Garber from Strategic Talent Resources, a non-affiliate of CWM, LLC.
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