Before you decide to sell an organization, you must decide either way if you would like to stay with it and for how long, or leave all together. There are strong advantages to you and the client if you remain part of the process after closing. If you are financing the sale, you’ll need to assure your investment is successful. Consumers, the business, and its stakeholders usually profit from such continuity, on-the-job training, and transfer of information and relationships.
Usually sellers stay with their business past any transition period in one of three capacities: as a consultant to the corporate and to the new owner, to supervise the business for the buyer or as part of a buyer’s larger organization, or sit on the buyer’s board.
The profit to sellers is that they continue to contribute to the well-being of the company and its stakeholders, and will gradually forge a post-sale life. The new owner benefits by learning more, faster, with less risk, and by transitioning key relationships more easily. Of course, continuing with the business is not without its risk, as the following example from our expertise illustrates.
Three partners had engineered a valuable company over time, and two of them had already decreased their work with the business prior to deciding to sell it. After the sale, they left the business entirely. The third partner, still working in the business full time, set to stay with the company once it was sold.
Unfortunately, a technical glitch caused the business to lose a valuable long-standing client. Management should have been imposing tighter controls on the problem all along, however the inevitable problem happened underneath the third partner’s stewardship. He took it terribly hard~ and very personally. Loss of the shopper hurt the business financially and also the third partner emotionally. He became withdrawn and eventually needed to be replaced.
Our purpose? He might have left on a high note, one that may have given him a very different outcome and feeling concerning his life’s work. Don’t disregard the lesson and also the questions that arise from it. How much do you really need to be responsible for your business after the sale? Do you hand the keys over now and take a victory lap, or risk financial and personal losses?
Go Where?
The “game” of business could be a fascinating one that you will realize it troublesome to leave. If your goal is to depart your company however stay in the business world, you should set aside time to explore beginning a replacement business, shopping for a business, or landing employment at an existing firm. Several former owners are eager to seek out the subsequent business puzzle to resolve and an opportunity to reengage in the business arena. Others take into account joining boards within the for-profit and nonprofit world. Choosing any of these alternatives would allow you to contribute your skills and network in an exceedingly meaningful method without necessarily a full-time commitment.
Nonprofits hold a particular charm for former business owners in that they permit you to pursue meaning over money. They will provide you the chance to reengage in a dream deferred, such as operating for a cause feeling vital to you whereas being appreciated for the talent you bring. For yet other former business owners, selling the business represents an chance to settle on impact over income by starting their own charities or foundations, or turning into active philanthropists.
Deciding to sell a business will not mean you have to go away it, but you do have to make a decision what you want. If you have had to finance the deal, you will not want to leave the business and therefore the fate of your cash within the new owner’s hands. On the other hand, we tend to have heard from many business owners that say they need out. Burnout or quite simply the DNA of the entrepreneur crying out occasionally for change. Having the right exit strategy – staying proactive for the time being and getting proactive outside the business – will drive how to sell a business.
I invite you to use these concepts to form the choice best for you, and produce your exit strategy.
Marian Cook is a highly sought after business transition expert and speaker with over 25 years experience helping business owners design their best-life exit strategy, and improve their business performance and valuation. She is the co-author of “Selling Your Business For More: Maximizing Returns For You, Your Family and Your Business” (published by Macmillan). If you are ready to sell a business and jump-start your business sale process, connect with Marian via her free tips, articles, checklists and blog at Business Transition Experts.
