The sale of a business can be lucrative for a property owner. Typically, those who sell businesses worry primarily about optimizing the revenue generated. However, many business owners feel a sense of obligation to their customers or clients.
They may also feel responsible for the professional futures of their employees. They may worry about the transition to new ownership and the possibility of the company failing. Preparing to sell a business can theoretically take some of the risk out of the transition to new ownership.
How can the current owner of a successful company set a buyer acquiring that organization up for future success?
1. Coordinate with key workers
Business acquisitions often lead to a loss of talent. Researchers estimate that approximately a third of employees at acquired businesses leave within a year of the sale. Organizations rely on competent, experienced workers to function efficiently, so those losses can prove devastating. Those preparing to sell a business can potentially communicate with executives, salespeople, managers and other professionals who have an outsized impact on company operations. Negotiating new contract arrangements could help ensure that they stay on after the acquisition.
2. Offer on-site support
Transitional support from a former owner can make all the difference after an acquisition. Even if the acquiring party has experienced running a business or working in the same industry, they are likely unfamiliar with the ins and outs of daily company operations at the acquired business. When the current owner agrees to stay on to provide support to the new owner, they can train them on all critical job functions. They can also share their insight into the skills and needs of individual workers. Prior owners may agree to stay on full-time temporarily and then taper off into a consulting role to ensure minimal hiccups during the transition to new ownership.
3. Renegotiate with vendors or clients in advance
An owner preparing to sell a company can negotiate contracts with outside parties that help ensure smooth business operations after the sale transaction. They could lock in vendor arrangements for another year or ensure that clients intend to stay with the business for the next quarter. Taking the time to address contracts that might expire soon after the sale of the business can ensure that the new owner has an opportunity to take the reins without key resources becoming unavailable or sales suddenly declining.
Those preparing to list a business for sale may need help identifying steps that can ensure the future success of the company, and that’s okay. Planning in advance can make major business transactions less risky and may even help increase the final sale price for a company.
