We’ve seen too many instances where sellers hoped to stay with the business after its sale, but their employment was ultimately terminated by the buyer. Any buyer – strategic or financial – will have systems, processes and policies that will be implemented within your business – and staying with the company means – perhaps for the first time in a long time – that you report to someone.
It’s certainly possible for sellers to continue to manage the business post-closing, but you owe it to yourself to measure your own willingness to be obliged to execute someone else’s strategy and drive their integration of your business into theirs. Most sellers are initially overwhelmed by the financial reporting that larger organizations or private equity backed business are required to produce. Sales may be monitored daily; boards may meet weekly, and the amount of data that will be analyzed may prove exhausting. This isn’t to say that you can’t succeed managing your business under new ownership, but it is to say that it is a fundamentally different exercise when you are accountable to data driven and data hungry investors who are used to working long hours pouring through the details in spreadsheets.
Here’s another reason why taking time to figure out what you really want to do next is critical – you’ll be asked to sign an agreement limiting your ability to compete with the business you’ve sold. At least initially, these provisions will be extremely broad and mandate you to stay away from the industry you’ve grown up in entirely. But it doesn’t have to be that way! Everything is up for negotiation, and if you take the time to identify specific industry-related activities that you’d like to engage, we can help you negotiate for those results. Perhaps you’d like to go work for one of your customers or suppliers. Or maybe you have or would like to have a side business providing an outsourced service to your prior business (and others like it). We’ve negotiated hundreds of transactions and can help you carve out a path that keeps you happy and engaged, but also protects the goodwill that your buyer has paid for. The key is YOU identifying precisely what you want to do and when you want to do it before you begin to negotiate your non-compete.