Many business owners have the ill conceived image of the buyer of their business signing the APA, pushing it across the table to them, where they execute the document, and then that’s that - they wash their hands clean of their old business. Aside from most business transactions actually happening virtually these days, the prior owner of the business is not done with their business just yet! After selling a business the final stage of the sale process is actually the training and transition period and not the aforementioned closing.
During the training and transition period a number of key events occur. The first and possibly most important is presenting a united front along with the new business owner to share the company news and reassure employees that the business acquisition is a positive event. Often the only real exposure employees get to the mergers and acquisitions industry is the laying off a slew of employees when two large companies merge. Assuaging their fears and making sure that lines of communication stay open is very important to the success of the business moving forward.
Following the announcement of the business sale to employees, the old business owner will spend time working close with the new business owner, sharing their key knowledge of the company so the buyer can be just as successful as they were at running their business. This knowledge transfer may be providing warm introductions to the new owner of key vendor contacts who provide very specific services or explaining the details of integral customer accounts.
During the training and transition period, the prior owner will also support the training of the new owner. This process may include training on a custom customer relationship management software, to the fine details of completing a customer service. Depending on the business, industry, and the skillset of the buyer, the training may be more or less intensive. However, the terms of the training and transition period will be outlined in the APA, so all parties will be on the same page before beginning this stage of the business sale process.
Though the last step in the business sale process, the training and transition period should not be rushed. The final step should be used as a time for the new owner to ask all of their questions and for the prior owner to share the tools of success for their business.
To learn more about the business sale process including the training and transition period, we invite you to schedule a free consultation with one of our brokers, or visit our website for more information.
Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle!