How to Sell Your Business to Your Employees

  

There often comes a time when you are forced to sell off your business, or when you rather feel the best option left to you is to sell it off to some others. This is when you consider if to sell to external bidders, business associates and partners, or to even sell to your paid employees. It sounds crazy that anyone could sell his business to his hitherto paid employees, but it is not impossible and there are even some benefits in this arrangement if it is well managed and everything sails through perfectly.

How to Sell Your Business to Your Employees

Before going into why it is most beneficial to sell your business or company to your paid employees and staffs, you must be able to address some fundamental questions as to the purchase and transition process and how things will work out perfectly for all parties concerned. Some of the questions you might have to consider before selling to your paid staffs are –








Which of your partners or paid employees would be most suited to buying this business, and why?

Does the intending buyer have the funds to make a buy-out, or is he partnering with others you know or don’t know to make the purchase?

Can this buyer or buyers manage things while the sale and transition is still in progress until final ownership is assumed?

Does this employee or group of employees have the management vision and business sagacity to own this business/company and make it a more profitable venture on the long term?

Is it possible that the new owners and management would need your help to steer things in the near or distant future?

Will the buyers be paying for this business from their own savings and funds/capital or will payment be made from future company profits?

Will the employees-buyers be able to perform successor obligations and provide necessary indemnities?

Can these buyers be able to manage the risks or even need future loans to stay afloat?

These among others are just some of questions you need to ask and obtain answers to before determining who buys your business and the reasons theretofore. Here are therefore some of the benefits why it might be best to sell to your partners or employees:

The current management or employees understand the business terrain, its demands and permutations, and also have a history with all the customers.

The current employees already run the business one way or the other and the time required to close the deal or make the transitions will be much shorter.

When current employees, management or partners buy the business, the need for outsiders to tour the company facilities and scrutinise company records and finances is ruled out.

There won’t be any disturbance or disruption of day-to-day business activities from outsiders while the transition is in progress, since the workers will be the would-be owners.

Dirty little secrets are kept secured by the buying team because they are already in the system, and the confidential business secrets of the business are kept secured.

Workers are motivated to be more pro-active and profit-minded since they are coming into the business and have bigger stakes and interests than ever before. They are tasked with making the business succeed under their hands like it has succeeded with past successors and owners.

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