When selling a business, owners first needs to ask themselves some critical questions and answer them truthfully before answering what they will do if they sell. Ask yourself:
What role am I playing currently in my business?
If you aren’t playing a critical role then perhaps you should leave after the sale. However, if you have valuable relationships with key clients or staff members, then you may be able to enter into a lucrative consulting role post-transaction to generate new sales. Most buyers will embrace your involvement post-sale if you’re performing a valuable role for the business today. Some non-industry buyers might even require it.
Do you really want to remain post-sale?
Some owners can’t be involved with the business post-sale because they are a hands-on operator and can’t stomach someone else making decisions they once made themselves. Think long and hard about the type of owner you are and the type of staff member you may have to become if you were to stick around the business post-transaction. Talk to your significant other and trusted advisors about this important topic. The answer to this question may help you decide if you remain post-sale.
Can you afford to leave post-sale?
Perhaps lack of performance necessitates a sale of your business to a larger company that is performing better. If you planned for a sale financially, then you may no longer need the income that the business has provided you with over the years that you owned it. If that’s the case, then refer back to questions 1 and 2 above as you decide about your role post-sale. However, if you need to generate a salary post-closing, you will need to position for this with the buyer early in the sale process.
Selling a business can be incredibly difficult, especially if you don’t know how to check whether you’re ready for a sale. Fortunately, Kaulkin Ginsberg can help you navigate those choppy waters. We have worked with small, mid-sized, and large privately-owned companies, Fortune 500 corporations, and financial investment firms on their collection agency M&A strategies for thirty years. Whether you’re seeking professional sell-side representation, assistance forming a partnership or joint venture, a transaction assessment, or a valuation, Kaulkin Ginsberg will guide you through the process. For more information, or to schedule a confidential discussion of your business goals, contact us here or at firstname.lastname@example.org.