Selling your company can be a lengthy process. First, you have to put together a valuation and create a business listing, then you have to vet your potential buyers and advertise your company without giving away any of your secrets, and then you have to get through all of the paperwork and hurdles that come with the actual transaction.
But, what if there was a way that you could smooth out some of those processes? What if they were someone you could turn to who would buy your business who already knows the ins and outs of running it? What if that person was someone who already works for you? How would that change your sale?
1. They Can Ensure Continuity of Service
Selling to an employee makes it much easier for you to explain to your clients that although ownership is changing, they will still be able to expect the same level of service they are accustomed to.
If you have good employees, chances are, they are already very familiar with your clients. Instead of having to introduce a new owner who may make any number of changes, you can explain to your clients that someone new will be taking over, but they can expect their services to continue, business as usual.
2. You Don’t Have to Worry About Advertising
Selling your business often means reaching out through advertisements to potential buyers. Creating an accurate valuation, deciding how much information to share, and vetting buyers and getting them to sign confidentiality agreements is a time-consuming process.
By selling to an existing employee, you already know that they have a non-compete agreement. You can talk to them in detail about what their plans are for the business and help point them in the right direction without having to spend a penny on advertising.
3. They Know Your Vendors
Not only does your employee have relationships with your clients, but they also are familiar with your vendors. That means it will be easier for them to continue the relationships you have created.
This is particularly important if you’ve created friendly relationships with your vendors. You don’t want them to have to struggle to replace you as a client once your business transitions to new ownership.
4. They Have a Vision for Your Business
If there is an employee at your company interested in making the commitment to buying it, they most likely have a vision for where the business can go next. They are familiar with your industry and the challenges it presents and want to do what they can to grow.
5. You Know Who You’re Trusting With Your Company
There is a lot to be said for knowing your company is in good hands. After all, you didn’t spend years of your life sacrificing time with your family and creating a work-life balance only to see your dream destroyed as soon as you sell it.
Choosing the right employee to take over your company can greatly lower the pressure you feel to find someone who knows how to take care of what you created. They’re already someone you can trust.
Could Selling Your Business to an Employee be a Solution for You?
Selling your business to an employee is a great way to smooth out the transition process. By passing your company on to someone who is familiar with your business’ inner workings, they will be more easily able to continue to grow your vision using the connections you have created.
But, just because you know an employee who is interested in taking over for you, doesn’t mean the sale process will be completely straightforward. There are still a lot of aspects to the deal that will need to be worked out.
Consider hiring a business broker to handle the sale process. We know the ins and out of ownership transfers and can help make your transition a smooth one. Contact us today. If your company has EBITDA of over one million dollars and have more that 15 employees, with good accounting records, it is possible for your employees to buy your company with no investment on there part, with PRE-TAX DOLLARS, and a 5X to 7X multiple of EBITDA. Learn more here http://dolansales.wpengine.com/selling-with-1mebitda/