At some point, you might think about selling a business. It might be time to retire or it might just be time to move on to a new phase in life. Selling a business to an employee is a great way to ensure that your business is taken over by someone who knows how it should be run, but doing so isn’t always a straightforward process. Working with the right business broker can greatly ease the burden of navigating it alone.
If you want to ensure that your business is left in the right hands, it’s a good idea to ask yourself a few questions first. These questions will not only help you to determine what to do next, but gives you more of a chance to impact the future of the business that you are departing.
How Will it Impact the Business?
Given the significant amount of work that goes into building a business, it makes sense that you should ask how its sale is going to impact the future of that business. Before closing, ensure the employee to whom you are selling understands the operations of the business and has a solid plan moving forward. How your business fares after you leave can still impact your reputation, so make sure that you leave the business in good hands.
What Does the Transition Look Like?
You also need to know what your transition out of the business will look like. Is the purchase going to be a long-term process that involves multiple employees, possibly through the use of an Employee Stock Ownership Program? Are you selling to a single employee, turning over the reins entirely and simply moving on? You owe it to both yourself and the business you’ve founded to come up with a reasonable plan for transition, especially if you are selling your business to someone who is already a part of the existing business structure.
How Will it Impact Your Other Employees?
Finally, it’s wise to think about how your sale is going to impact other people with whom you have worked. Will an employee buying the business trigger a mass exodus from the company? Will you risk endangering personal or professional relationships if you sell to one employee instead of another? What happens to the existing hierarchy if the person who buys the company is lower on the org chart than some of the others who stay on? These are all questions that will impact your business and thus all questions that you should answer before you make your final decision about a sale.
Selling a business to an employee can be one of the best ways to ensure that a competent and caring individual takes over your business, but that doesn’t mean that you should do so blindly. Take some time to answer the questions above and determine the impact that the answers will have on both your personal and professional life. If you feel like your company will be in good hands, selling a business to someone who is already familiar with its workings can be a good way to ensure that your legacy isn’t tarnished when you move on to your next project.
Are you considering selling your business to an employee or just want to know the value of your business? Contact us today for a free consultation so you can get paid what you deserve.