Congratulations! You’ve sold your business – but your job doesn’t stop there. You still have a few more things to do.
Tips once you’ve sold your business
Prior to settlement make a list of everything you need to go through with the business owner; it will include a tonne of things including:
- Handing over keys, security codes (and update the contact at the security company)
- Handling over logins and passwords
- Transferring business social media profiles
- Handling over clients lists (possibly exporting from your accounting software)
- Handling over contacts, suppliers and other key people for the business
- Advising roll over leave accruals for staff (unless actioned in the settlement)
- Introduction to staff (encourage individual one on one meetings with key personnel)
- Tour of your premises, computers and even neighbouring businesses
- Introduction to your customers (see more below on this)
- What their duties will be (as the owner) and how to perform those duties
- Duties of the other staff and how to monitor them
- How to review reports; things to watch in the financials or other KPIs
Are You Thinking of Selling Your Business?
- Have a debrief meeting with the new owner; find out how much (or how little) they want from you. Whilst a handover is usually included in the business sale, some new owners are keen to just get on with their plans and learn only the basics from you. Others will want you heavily involved for quite some time, and in fact, you may become an employee of the business for a time.
- Let go. This ‘baby’ is no longer yours, so let go and allow the new owner to do things as they would like. I know in my old business, they changed the logo, which I looked at and wondered …. but I reminded myself it’s not my business anymore, so move on. Think of the business less as your baby and more like an asset. If you were to sell a rental property or piece of business equipment, you wouldn’t feel an attachment – so start thinking like that. A new owner will likely do things differently; you may not agree with their choices, but it’s literally not your business!
Starting A Business With The Exit in Mind (Exit Strategy)
- Encourage the new business to do some planning and share their ideas. Often a fresh set of eyes will actually see areas for improvement and growth. Encourage and nurture that – and again – don’t be offended or hurt (or disappointed in yourself that you didn’t think of that). It’s not a competition; if they succeed then that’s great. Your legacy will live on and particularly if there is a client retention clause in the contract, your final balance won’t be jeopardized.
- Communication is very important. This starts with your staff, then your clients and then with the new owner. Once the business settles, you will want to tell your staff. Start with your most senior staff, meet with them (ideally in person) and explain what’s happening. They will be possibly shocked, nervous, scared and even confused. Their first question will be around the security of their job and what the sale means to them. Allaying fears (presuming the new owner has the intention to keep everyone else on) and reiterating for them that their job is safe and all will be good. If they’ve been there a long time and you’ve been a good boss, it might be disappointing. Invite them to come back with any questions once they have digested the news and ask them to not mention to other staff until the end of the day once you’ve spoken to everyone. If you have a large team, then after telling your key personnel (they do deserve the courtesy of personal advice) you may call everyone together and make an announcement. If it’s an extremely large company, then you may put out a memo, although remember, once you do that, it’s going to be public knowledge.
- Tell your clients. This is a busy time for you as you need to alert your staff and your clients almost simultaneously. If the client is a large client who has been with you for a long time, then you may want to do this in person. Alternatively, a nice and well-worded letter advising you have sold and introducing the new owner and reiterating that little is changing; still always great service and team you’ve got to know etc. Remember people are going to ask ‘why?’ Even if you were selling for negative reasons (you’re over it, it’s hard work, the business isn’t making money, your staff or clients drive you crazy, the industry won’t be around in 10 years etc) … don’t share this at any time, before, during or after the sale. Keep it always positive. Reasons like: I want to pursue a new direction, I want to retire, or, I want to slow down are better.
How Sellable is Your Business?
- Introduce the new owner to your staff. Pre-discuss with the new owner how they’d like to do this; individually, as a group, or perhaps a combination of both. Encourage your team to be welcoming to ensure this goes well for all.
- Introduce the new owner to your key clients. The new owner should meet with them in person (or via Zoom) and start building a relationship with them. It’s a great idea you are there at least for the initial part of the meeting, to introduce, break the ice and get things rolling. You may leave during the meeting to allow them to discuss things further …. or stay. Tee that up with the new owner first what their preference will be.
- Introduce the new owner to suppliers; in fact, new supplier applications may need to be created. On that note, ensure that if you have an account with the supplier, that you advise them in writing you are no longer the owner of the business from XXXX date and will no longer accept expenses incurred by the business in your name. If you don’t need the supplier, then you may even close the account, or ensure it’s been transferred to the new owner. Naturally, make sure the new owner has set up his/her account with that supplier so that the flow of products or services will continue seamlessly. This list will also include utility suppliers, tech services, telephone, postal services, couriers and more. I suggest you get a list going now!
- Be in co-operation mode. The initial period of transition for the new owner can be a little hard on everyone. People inherently don’t like change and a new owner can be a big change, especially in small businesses. Be diplomatic. Even if the new owner has ideas you disagree on, give advice (if they want it), but let it be their choice. It will be worth ascertaining how much advice they want or don’t want.
- Training moves to assistance. The training phase will slow down as they find their feet in the new business and you move to assistance mode. Your input may be required less and less, but do ensure you have allocated time to be available as per the contract. You may even take on a mentoring role, depending on the situation. If the person is somewhat new to business, you might even recommend an awesome business coach, like yours truly to help them navigate all aspects of the business. Your role is to help them understand the business from top to bottom, not necessarily train them on how to be a business owner. Some people come in with a good level of skill and experience, others are brand new and very inexperienced when it comes to business.
- Watch your bank account; I had customer payments from the old business (but the new owner’s invoicing) going into my account for over 18 months. Sometimes people just don’t make the effort to change the details, despite heaps of reminders. Unless you want to deal with transferring money endlessly or the accounts department of your old business frequently contacting you to find out if someone had paid, simply close that account. If the account is closed, the money will bounce and it’s not your issue to spend time dealing with.
- Remember the terms of your contract; if you are not to use the name or not perform that function for 3 years, then diarise that date and ensure you don’t breach your contract. As was my experience for several years (guess my marketing was too good) I was reminding people that I was no longer that business. I would go to networking events and be introduced as Donna Stone, owner of XYZ (old business name) … so I would have to very nicely remind everyone that’s my old business name I sold a while ago and my new business is called Stone Business Coaching.
If you need any assistance with preparing your business to sell, managing the post-sale phase or introducing an expert business coach to your new owner, I’d love to hear from you – just call 0411 622 666.
