When you decide to sell a business, one of the most important things you can do is have a transition team in place. Part of the company’s value is its ability to continue without problems when you step away, so in order to do that, you must have a transition team in place when you sell a business. Here’s everything you need to know about getting a team together.
If you haven't already done so, you might want to check out our guide to selling a business here for an overview of the process.
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Why you need a transition team to sell a business
You will need a transition team to sell a business for several reasons. The most basic reason is because it must continue to operate after you step away from the company, but that isn't the only reason. Of course, if the company can't operate without you at the helm, it isn't worth much to a potential buyer, so you should have a transition team in place before you sell.
In addition to keeping the business operating, you also need a team to make the transition go smoothly. Customers and employees alike will be affected by the sale of the business, so you should have people in place to ensure that the transition goes as smoothly for both groups as possible.
You should also have a transition team in place when you sell a business because you will have a lot more to handle during the transition process, and you will not be able to do it alone.
What should your team look like?
A transition team should include several members with different roles to fill. The most obvious person to have in place is a manager or CEO who can take over your duties, both during and after the transition. The person will need to be fully trained before you start the transition process so that they can handle your duties while you're working with the broker or buyer to make sure every aspect of the sale is taken care of.
Beyond the manager or CEO, you should have two groups of people with different responsibilities. The manager or CEO will handle the company's day-to-day operations, which means the business of actually running the company. This person will need a team of their own to handle operations while the sales process proceeds.
In addition to a team to manage day-to-day business operations, you will also need a team to help with the actual sale. This team may include people like a broker, lawyer and account but also some internal team members to work with them and make sure they have everything they need to complete the transaction.
You need these team members for a transition when you sell a business
Here's a list of all the team members you should have in place for your transition team when you sell a business. You probably already have people in place to fill these roles. It will only be a matter of identifying where they fit in helping the transition process go smoothly.
Before we go into the list of internal team members, we should note that it's important to have external team members like a lawyer, broker and accountant in place for the transaction.
- Manager or CEO – As already mentioned, this is the person who will steer the ship through the transition and possibly continue in that role afterward. This is the most important person to have in place. No business can go through a transition without it. You will have so much on your plate while dealing with the actual transaction that you must have someone to manage the daily operations, so the business continues to function smoothly during the transition.
- Customer service manager – This person will make sure that customers have everything they need as the transition progresses. It's easy for things to fall through the cracks during the sale business, but if you allow that to happen, customers will no longer frequent the business during and after the transition. Having a customer service manager to oversee things from the customers' perspective will make sure none of them get left behind.
- HR transition team lead – This person will ensure that employees have everything they need during and after the transition. One of the issues that often arises when you sell a business is that employees become a bit antsy during the transition. They need to know that they are being looked after, and they need to be kept up to date on what's going to happen during and after the transition. An HR person should oversee employee needs to make sure workers aren't left wondering whether they will have a job after the sale or whether their duties will change drastically. Those thoughts create an environment of confusion, which can then rub off on customers.
- Liaison to work with the external team members – This person will ensure that the lawyer, broker, accountant and other team members have everything they need to complete the transaction. This person will work closely with you and the various departments within the company. If you have an assistant or secretary, that person might be the perfect one to fill this role because they already perform many of these functions.
In terms of choosing a manager or CEO to head the company through the transition, you should also consider whether you want to stay on with the company temporarily after the sale is completed. That will really ensure that your customers and employees have a smooth process because there will be some continuity of leadership. If you stay with the company, you should have a clear understanding of your role
It will also give you a chance to show the new owner the ropes, so nothing catches them off guard after they complete the sale. You might want to work this into the sale agreement so it is clear up front how long you will be staying with the company after the transaction closes.
Client database and customer relationship management
In addition to choosing members for your transition team when you sell a business, you should also make sure that you have other elements in place to make things go smoothly. Specifically, you will need to have a client database and customer relationship management system in place. The new owner won't be able to take over smoothly if you keep a list of all your customers in your head instead of in a computer file.
The customer service manager should be able to manage customer relationships during the transition process, nurturing them so that they don't go elsewhere during or after the transition. They need to understand that the goods or services they have come to expect from the company will be just as good if not better than it was before the transition began.
Getting a transition team in place when you sell a business can seem like a tall order, but once you have the right people assigned to the tasks that must be completed, you will be thankful that everything is taken care of.