Transitioning after the sale
Selling your business is bittersweet. It’s a new chapter, one filled with mixed emotions. You’ll need to effectively navigate changes in involvement, communicate with stakeholders, and resolve conflicts for a smooth transition.
How to communicate the news
Announcing deals often unintentionally stokes rumors based on limited information. Be proactive in addressing:
- Employees: Explain expected impacts on roles, responsibilities, and futures post-close. Provide retention offers to valued talent.
- Customers: Emphasize continuity in product or service quality levels.
- Suppliers/Partners: Provide visibility into dependencies like inventory orders and roadmap transparency.
Carefully consider timing, formats, and frequency for transparency without allowing distraction.
New reality of involvement
Post-close roles for owners range from complete departure to ongoing leadership, depending on deal structures. New governance can mean adjusting autonomy expectations for sellers used to unilateral control.
Common post-close involvement structures include:
- Consulting Role: Project or hourly work providing strategic advice
- Employment Role: Salaried position, often with growth incentives
- Board Role: Governance seat with influence tied to equity stake
- Legacy Role: Ceremonial affiliation maintaining brand continuity
What if you regret the sale?
Seller’s remorse. You’ve heard about it because it’s quite common.
Even if you’ve done a deal you feel good about, you might find the transition difficult. For one, you’ll have less (or likely zero) control over your business. You’ll have a lot more money than you did before, but the routine of your life will likely feel totally different. This is normal.
If you do end up feeling this kind of remorse, revisit your original motivations. Remind yourself why you wanted to sell the business, and what your goals were. This is a good way to ground yourself in your motivations—remember that the version of you that wanted to sell the business had very good reasons for doing so (assuming you were thoughtful about the process).
Conclusion: Sell your business smoothly with Rejigg
To recap, the key components for successfully selling a small business:
- Decide when and why to sell. Reflect deeply on motivations, priorities, and ideal timelines for transition. Draft ambitious yet realistic objectives rather than chasing elusive optimal market timing or feeling pressure from external forces.
- Prepare to sell. Methodically prepare relevant historical documentation regarding operations, finances, and ownership. Normalize information to accurately reflect sustainable business performance. Get your house in order.
- Find buyers. Negotiating directly with buyers tends to be the best way to get the outcomes you want—without forking over a huge portion of your business to a broker. But auctions and targeted outreach can cause you to either end up with a buyer you don’t like, or end up missing out on your dream buyer. That’s why we built Rejigg: we connect you with thoughtful, pre-vetted buyers and let you do a deal on your terms.
- Negotiate a deal. Scrutinize deal structure aspects like payment timelines, earnouts, and liability exposures as much as headline valuation multiples. Protect against lopsided risks once currency changes hands. Balance legal protections against relationship-straining over-negotiation.
- Due diligence & closing. Set reasonable expectations around due diligence duration and depth required to alleviate buyer skepticism and level of distraction based on business complexity. Develop structured rhythms and tone for managing inquiries.
- Transition post-sale. Over-communicate with employees, customers, and vendors throughout ownership changes. Assume positive intent when inevitable conflicts arise post-close. Anchor against sentiments of seller's remorse by reconnecting to original motivations.
