Seller Can Stay After Sale of Business
Selling a business and walking away can be very difficult. But in many cases, as part of the sale, there’s a transition period that can be as short as a month or as long as a year or two, depending on the size of the company and the role of the owner.
In most situations, once the seller passes the baton to the buyer, the new owner wants the seller to remain on board as part of the team. It helps shorten the learning curve and provides a seamless transfer of key relationships.
In the typical business sale, a transition period of several weeks is included. Sometimes a telephone consulting period is added that can span six months or so with specific time limitations alloted so the seller is not overly burdened. Also, the seller may additionally be retained as a consultant at a negotiated rate. In some instances, a long-term employment contract is transacted and the seller maintains daily involvement for a much longer period of time.
For the owner who wants to sell the company and leave quickly, the focus should be on the development of a strong management team. Be sure to introduce key employees/managers to your major customers and vendors and look at ways to delegate responsibilities. The more the customers think they are interacting with “the company” versus the “owner” the easier the transition.
If you’ve established a good management team, less time will be required for the transition to the new owner. In addition, a well developed team usually adds value to the sale.
Occasionally there are owners who want to sell but just aren’t ready to quit working. They may be looking to sell early to get a premium price while the market is in their favor or to get away from unwanted or overwhelming administrative and management duties.
Either way, long-term employment contracts can be included in the sale agreement. The seller can stay on board and work with the business a few more years while still drawing an income and benefits.
If you’re selling your business, in most cases you won’t be able to walk away the day after the sale and in most cases you probably don’t want to. Talk to your business intermediary about the true timeline of the sale and transition. If you want to sell while the price is right, but you’re not quite ready to leave immediately, consider the options available to sell now and maintain a role with the company.
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