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Selling Your Company – How Long Will You Stay On Afterwards?

No Longer The Boss

No Longer The Boss

When selling a private company how long should the seller expect to be asked to stay on afterwards? What are reasonable expectations of duties, payment and time commitment?

It’s very common feature of private company sales that the new owners will want you to work with them for a period of time to make sure the transition is a success. This may range from a consulting arrangement for a few weeks to show them the ropes, and secure the goodwill in the customer base, to staying on indefinitely as Managing Director at a good salary.
 
You Need To Recognise That Things Will Be Different
 
Whatever the arrangement the world will have changed. Your business will now be a division of the acquiring company and no longer your personal domain. You might sit in the same office, but you are no longer the ultimate boss, no longer the one calling all the shots. To make the new arrangements a success will require an attitude adjustment on your part, and for the new owners to respect your feelings about the change. You must accept that the new owners are entitled run things in their own way, it’s their company now, and you need to be open-minded about new practices and perhaps technologies.
 
Get Clarity On Role and Payment Expectations
 
If the arrangement is a consulting or short term arrangement this will be defined by a separate consulting agreement. The agreement should define what duties are expected, the time period and number of days for which you will be involved, and the daily rate. You should expect to have to offer between 30 and 60 days free of charge as part of the selling price depending on the size and complexity of the company. Make sure the consulting duties are clearly defined, you don’t want the days to be spent driving delivery vans to cover staff holidays! Our advice would be to hold out for a relatively high daily rate – this will ensure the new owners only bother you for the really serious stuff.
 
What If Things Just Don’t Work Out?
 
The important thing is that you have sold the company and turned it into a liquid asset. If you really can’t get on with the new owners, providing part of the payment is not tied to staying for a certain length of time, or meeting certain targets, make sure your contract has a clause that allows you to leave. If part of your payment for the company is tied to performance, or you can’t afford to give the salary up, then you will have no choice but to make the best of the situation.

 

If you are interested in finding out more about these and other issues relating to the sale of a private company one of our business sale experts would be delighted to talk to you in complete confidentiality. Click CONTACT ME to book an initial phone conversation or call us on 01604 432964.

 
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