Tag Archives: selling a business

Protecting Your Best Asset

If you are planning your exit from the business, what is the best asset that you have to sell? Unless you have patented product, exclusive rights, or long-term customer contracts, you answer was likely “Our people.” Even if you have … Continue reading

Posted in Building Value, Entrepreneurship, Exit Planning, Leadership, Selling a business, Strategy and Planning | Tagged , , , , , , , , , , , , , , , , | 3 Comments

3 Responses to Protecting Your Best Asset

  1. David Cunningham says:

    John, You are spot on about the importance of being able to get your staff to support the transition. The process starts by finding out as much as you can about the buyer’s intentions for your employees. With that information you can plan for incentives that give employees who you believe are likely to be retained, a reason to make the transition work,and offer reasonable compensation to those who are likely to be terminated. The retained employees have a better attitude if they believe that the seller cared about those who did not fit the new owner’s plans. In one acquisition situation we debated how much money was appropriate and how it should be distributed. Our decision was that the employees had exceeded normal commitments to the company, particularly in the early stages and they deserved financial reward. We voted and arrived at 5% of the capital gain on the sale. These funds were allocated on a pro-rata basis of the employee’s accumulated base salary without allowance for bonuses. On this basis a secretary who had worked for 5 years at $30,000 per year and earned a total of $150,000 received the same amount as a VP of Sales who had worked 1 year and earned $150,000. Those employees who were retained in the transition were subject to vesting requirements. Those who were released were paid a month after termination. We considered a longer delay after termination to discourage defection to get a quick cash bonus, but the conditions offered by the buyer made it unlikely that retained employees would quit. This arrangement resulted in a smooth transition.

  2. Larry Amon says:

    The easiest thing to do is to share the profits of the company with your employees and to give them ownership before the sale. I was not planning to sell my company, but when the right offer came in I sold and my employees shared over a half a million dollars among 35 employees. 25 years later most still remain with the company..

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Exit Timing and the Global Economy

How much will your exit timing be affected by the global economy? Most small businesses serve local markets. Their owners, if they have thought about it, plan to sell to a local individual. If the local market is healthy, why … Continue reading

Posted in Economic Trends, Entrepreneurship, Exit Planning, Exit Strategies, Politics and Regulation, Strategy and Planning | Tagged , , , , , , , , , , , , , , , , , , | Leave a comment

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Business Buyers: The “Buy Now, Pay Later” Generation

If you are preparing to sell your business, your buyers will likely be members of the “buy now, pay later” generation. Generation X is the first demographic group to be raised in a culture that put little emphasis on savings. … Continue reading

Posted in Economic Trends, Exit Options, Exit Planning, Exit Strategies, Selling a business, Strategy and Planning | Tagged , , , , , , , , , , , , , , , , , , , | 1 Comment

One Response to Business Buyers: The “Buy Now, Pay Later” Generation

  1. This is one of the most realistic articles I’ve read on the topic. Sellers would be wise to listen to their advisors, and be advised earlier than they think they should.

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Ownership Transfer and Employee Security

When we start planning for the sale of a company, many owners ask me about sharing information with employees. They are naturally concerned that an ownership transfer will cause their workers to seek more secure positions elsewhere. This is true whether … Continue reading

Posted in Economic Trends, Exit Planning, Incentives, Leadership, Managing Employees, Selling a business, Strategy and Planning | Tagged , , , , , , , , , , , , , , , , , | Leave a comment

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Is Your Business Built on Individual Heroics?

Great employees are a wonderful gift, but individual heroics aren’t healthy for your business. Someday, you will start thinking about leaving the business. Perhaps you already do. When you begin planning for your transition, what will your company systems sound like … Continue reading

Posted in Building Value, Entrepreneurship, Exit Planning, Leadership, Managing Employees, Selling a business, Strategy and Planning | Tagged , , , , , , , , , , , , , , , , | Leave a comment

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