There are many ways to exit your business one of them is to let a staff member buy-in or buy-you out:

There are a number of questions you should ask yourself.

Are they competent?

  • A different process to family. Develop clear job descriptions, ideal person specs and performance appraisals for all key roles.
  • Groom key staff to “excellence” in their roles. Clarify their ambitions – independent interviews can help here.
  • Don’t offer the business until you KNOW they can manage it.

GROW YOUR REPLACEMENTS EARLY!

Can they afford it?

  • This is a thorny question. How can a foreman on $70k pa in a rented house with 7 kids be part of a management buy-out?
  • Be realistic, and be very careful if the deal will only work with massive support from you.
  • Don’t be shy of discussing money matters – on quite an intimate level. It’s YOUR business!

Will the staff allow it?

  • Sounds strange, but other staff can make or break a management buyout or buy in.
  • Carefully map the relationships in the business, and see who the key opinion setters are. Work closely with them during the transition to ensure good buy-in.
  • Put all management involved in the buy-in, and those closest to them, through a behavioural mapping process like Extended DISC or similar tool.
  • Spot potential issues early and defuse them through education.

IF YOU ARE LEAVING MONEY IN – YOU MUST PROTECT YOURSELF!

 

Whatever you decide the advice you will receive from ABL will be invaluable for your exit strategy.  Contact us and we will put you in touch with the best advisor for your business.  Advantage Business Advisors are with you every step of the way.