One-Man Wolf Pack
One day a long time ago you had a vision of working for yourself. Super-powered by the fortitude to take the leap into the world of self-employment, you made good on that vision for yourself and today you have many years of success behind you as a small business owner.
As the sole owner and operator throughout your business’ existence, you’ve managed to do it all on your own; The books, the client relationship building, the ever-changing marketing, the hands-on servicing and work were all taken care of by the one and only you, and you never needed any help. Truly, you’ve done an exceptional job of managing your time and maximizing your profits.
What are you selling?
Retirement; That word that has crossed your mind a few times throughout the last few years is finally nagging you to the point where you know it’s time to do something about it. So, being that it’s your first time selling a business, you Google “business brokers near me” and you call the first business brokerage firm you find to start getting an idea of what selling your business will look like.
Learning more about the road ahead, you realize that you need to learn more about the appetite of the buyer market and what makes your business attractive to buyers who are currently going after listings in your industry. There are several value-building factors that a business brokerage firm will help you to identify, but for this blog we’re going to talk about one specifically: The Key Employee.
As the sole owner and operator of your business, you are the key employee of course. Obviously for you, when it came to staying profitable and having a manageable work-load, this had always worked for you and was a great choice. But now, you must pass your business onto the next person who will take it into the future, but you won’t be going with it.
So, are you selling a business? Or are you “selling a job”?
Having a Key Employee is a heavily-weighted factor when selling your business. Without a key employee to support the new owner and keep operations and systems flowing smoothly through a transition, the risk makes your business unattractive to the larger portion of the buyer pool out there. It can be sold, sure. But, we’re talking about trying to sell to a very select and rare handful of buyers out there who will not have an issue with making a large investment on a book of business and assets without the support of someone who knows how to maintain the time-proven systems that made it all profitable. After all, it’s the time-proven systems that make consistent sales and cashflow possible.
Unlock the whole Buyer Pool
When you sell a business, as the seller you can negotiate the amount of time that you are willing to train the new owner with the help of your San Jose business broker. You may offer a week or two, or even up to a whole year of support. This is certainly a good way to remedy the absence of a Key Employee following the sale of a business. But, if your business is highly profitable, your best bet is to hire and train a key employee, full time or part time, to take over some of the responsibilities such as doing the books, answering phones, and other administrative and procedural duties. This not only provides that uber-important support for a new owner but will allow them to focus on the parts of operations that are most important to staying profitable and growing the business.
Have more questions or are you wondering what other things you haven’t thought of while contemplating about the sale of your business? Call our office to start talking to one of our veteran agents so that when a buyer asks Google to find a “business for sale near me”, there will be little doubt that your business is the right one for them.
JC Myer is the Operations Manager with Sunbelt Business Advisors San Jose CA. He can be reached at (408) 436-1900, or at [email protected]
Contact your “Business Broker Near Me” today.