You have been successfully running your business over the past number of years and you have decided to move on to life's next big adventure. It can be challenging walking away from something you have worked so hard at and invested so much of your time into. Selling your business can be fairly time-consuming onto itself. You will want to make sure there is a plan in place for when you hand over the reins to the next owners. This will not only give you peace of mind but will also help in the sale of your business to the right buyer.
There are many things to consider when it comes to setting up the pieces of a smooth transition, and you shouldn't wait to create one once the business is sold. By thinking about a smooth transition from the first interaction with a potential buyer, you will be off to a good start to closing a successful deal.
A smooth transition starts well before the sale is finalized. Negotiating a clear and detailed sales agreement will help with the seller/buyer relationship down the road. The Business Develpment Bank of Canada recommends that "… the ideal buyer is someone you can work well with and who shares your vision for the business". It is very possible that a significant amount of value in your business is your expertise and connection with your customers. The more you as a seller are willing to help in the transfer of that knowledge to potential buyers with make the sell of your business more attractive.
Create it together
The last thing either side of a transaction wants are surprises. Fostering close communication between the buyer and seller from the first interaction will go a long way in the success of both sides. Often this may also include assisting the Buyer's financial partners during the transaction.
If you as a Seller are unsure of what needs to be communicated, be sure to consult your advisory team (Lawyers, Accountants, Realtors, Brokers, etc). As challenging as it will be for you to leave the business you've worked hard to build, it will be equally challenging for the new buyer to pick up where you leave off. They may be looking to you for added support and you want every reason for the sale to go smoothly.
Manage stakeholder communication
You have been working on your business for a number of years and have built a network of partners, employees, suppliers, customers, etc. The Buyer will want to know that these key people are being adequately communicated with and reassured that the transition of ownership will not be significantly disruptive. Being open and honest, especially with your employees, can be crucial. Working with the Buyer on this timely communication plan can be beneficial. The goal is to make the transition as simple and non-disruptive as possible for all invested parties.
Know when to step back
It is very possible that as a Seller, you've offered financial assistance to the new Buyer and can be a strategy to attract a greater number of potential Buyers. It also means that you've got a stake in the future success of the new owners. Be sure to negotiate with the new owners what your level of involvement should be going forward. Many previous owners have a difficult time relinquishing control of the business they built. As the previous owner, you need to appreciate that the new owner may want to take the company in a new direction or leave their own mark on what they now own. This is perfectly natural and should be supported. Your responsibility is to help guide the new owners in the businesses existing systems and procedures. It is the new owners responsibility to take this guidance and modify it to their own style and business direction.