Selling Your Business: A Transition

 

Business owners invest a huge part of themselves in their work. Often the business becomes a part of your personal identity and something you tie your self-worth to, making it hard to let go and sell. It’s a difficult process for many business owners who are worried or doubtful of new ownership carrying on their legacy, but it is important to know when to step back and how to step back properly. Here are seven tips on how to successfully pass on your business to new ownership:

1. Keep Focused on Your Business

While in the process of selling your business, don’t forget that you haven’t left yet. Don’t let your business slide through the cracks and suffer because you’re busy closing the deal. Until you hand your keys over to the new owners, make sure that you’re operating business as usual. 

2. Plan Your Next Stage

Having a plan for the next stage of your life will make the transition easier for you when the time comes. It will help keep you busy and you’ll be able to throw yourself into whatever you have planned next and avoid any lulls in your schedule after selling your business. As well, keeping preoccupied will help you move forward, focusing on new endeavours and curbing the seller’s remorse that business owners often experience.

3. Transition in New Owners

Business owners often fear selling their business to new management and losing control of everything they worked to achieve. To sell your business it is vital that you have trust in your new owners. To gain this trust you can gradually transition them into their position, guiding them and helping them take on more responsibility.

4. Monitor the Transition

It is important to monitor your business during this transition and making sure that what you are teaching is being put to use. If you like what you see, you’ll know that your new management is well prepared. If your decreasing role in the business has started to collapse the company’s structure and productivity, you need to reassess how well your managers understand their new duties. You should stay involved and keep training the new owners because you don’t want to leave your business in disarray.
After all, if the business starts to sink once you have retired, you don’t want to feel compelled to intervene and keep it afloat, you want to feel comfortable that everything is under control and leave your business behind.

5. Step Back

As hard as it is to step back, it’s important to respect the capabilities of the new owners and let them take the lead. If they ask for your opinion or advice, by all means, lend a helping hand; however, offering unsolicited business advice or dropping by unexpectedly is usually overstepping your boundaries. You may be used to running the business but you’re no longer entitled to weigh in on how it’s managed.

6. Keep Moving Forward

Now that the transition is complete and you’ve planned what’s next, you just need to execute it. Moving forward with your new goals and objectives are key to transitioning into a life that is separate from your old business. Finding out what brings you joy and what makes you feel fulfilled are things you can focus your time and energy on.

7. Remember Your Purpose

One thing that business owners commonly experience after selling, but are unprepared to deal with, is the feeling of being useless. People often expect to still be involved with old work friends and receive calls from people in their industry, but the reality is once you sell your business or retire, these calls often stop coming in.
It’s important to remember that you are not defined by your business and that you are just as useful as you make yourself. The initial period after selling can be difficult, but if you cast your gaze forward, you can focus on your new goals you work towards new achievements.
                                                        
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BMO Nesbitt Burns Inc. (BMO NBI) provides this commentary to clients for informational purposes only.  The information contained herein is based on sources that we believe to be reliable, but is not guaranteed by us, may be incomplete or may change without notice.  The comments included in this document are general in nature, and professional advice regarding an individual’s particular position should be obtained.  BMO NBI is a subsidiary of Bank of Montreal and Member-Canadian Investor Protection Fund. “BMO (M-bar Roundel symbol)” is a registered trademark of Bank of Montreal, used under licence. “Nesbitt Burns” is a registered trademark of BMO NBI, used under licence.