You’ve just gone through the process of selling your company, a long and laborious task, which leaves many questioning if they have made the right decision. It could be your desire to venture to pastures new or that your passion for the business has become illusive. There comes a time when you have the opportunity to sell and move on. The question is, should you stay on and advise as a consultant or make a clean cut from your business.
Many entrepreneurs choose to stay on with the company to enhance the sale. By offering consultancy and training for the new employees, the value of the company increases and reduces the risks for the buyer. In some circumstances, you will need to stay on as a condition of the sell, the timescale of this differs and is dependent on agreed contractual terms.
Some sellers take on a consulting role for a period of 6 months so they can help the new owners at the initial stage of takeover, assist them in building relationships with the clients and then leave them to their own devices. This also suits those not wanting to head straight into retirement, so that they can maintain some elements of working life in their routine
Others choose to leave the business in the hands of its new owners. Once the company has been sold, it will evolve from the one that you know. A new culture will begin to emerge and you will have much less control over the company’s developments. It may also not fit in with your personal circumstance. If you are looking to make a fresh start and launch a new business, then maybe it would be better to cut the ties altogether and concentrate on a different venture.
Nadia Allaudin, senior vice president at Merrill Lynch Global Wealth Management, says that “There needs to be an understanding for the impetus for the sale or walking away. There needs to be a lot of conversations about how you’re going to handle this.” Once you have walked away from your business, there is no going back. Make sure that you are ready to make an exit emotionally and mentally.
Before committing to leaving or staying, ask yourself the following questions…
1) Do you feel ready to move on?
2) Are you still passionate about the company?
3) How would you feel about someone else dictating the direction of business?
You can only sell your business once, so do it right. Make sure that if you are staying, you agree on terms and conditions. A timescale would be beneficial to both parties; 6 months is a good length of time to allow the new owners to settle into the running of the business. It also gives you time to take a step back whilst contributing to the future of the company you have created.
By Hannah Richards, Content Executive at Amplified Business Content