[This article was written by Lizzie Weakley.]
Whether your business is well-established or recently successful, a change in ownership can rock the foundation that you’ve worked so hard to create. However, if you handle the transition carefully, you can maintain your existing profits while transferring ownership to new hands.
A successful business has a daily impact on employees, clients, and the industry that the company serves. As your business changes hands, make sure to communicate clearly and effectively with all of the parties who will be affected by the transition.
Start by telling your employees as soon as you know that the deal is going through. Depending on the size and responsibilities of your team, you may want to consult with them before the sale is finalized. Develop a plan for the transition that takes every employee’s needs into account.
Next, communicate with your vendors and clients. Let them know when the transition is taking place and what it will mean for their relationship with your company. Introduce the new owner, and express your confidence in their leadership capabilities.
Offer Employee Incentives
A loss of staff is one of the biggest challenges faced by transitioning businesses. It’s natural for employees to seek new prospects when their work environment changes. However, for the sake of the company, you need the team to stay on until the transition is successful.
Financial incentives are a great way to hold a team together during a transitionary period. Performance bonuses and raises should be given to any employees who choose to stay on. Team members who helped build the company may also expect a bonus that reflects a percentage of the sale.
Seek Legal Assistance
Legal issues that occur during a sale can have an extremely negative impact on a company’s future success. Before you sign any documents, contact a team of corporate transaction attorneys to guide you through the process.
In addition to monitoring the sale itself, corporate transaction attorneys will also review your company’s existing records and ensure that everything is in order. From transferring assets to paying taxes, it’s important that every aspect of the sale be handled in a legal and professional manner.
Take Things Slowly
The most successful transitions happen slowly over a period of months or even years. The new management team will need to learn how the company operates, and new employees will need to become acclimated to the company culture.
As the former owner, you may want to stay on with the company even after the sale is complete. Your presence will help both clients and employees feel confident in the direction that your business is heading. Bring up this possibility during the sale negotiations, and discuss appropriate compensation for your time.
Transitions are a normal part of a business’s life cycle. Handle every aspect with care and diligence to maintain profits throughout the entire process.
Lizzie Weakley is a freelance writer from Columbus, Ohio. In her free time, she enjoys the outdoors and walks in the park with her three-year-old husky, Snowball.