There are many ways to exit your business one of them is internal buyout – letting a staff member buy in or buy you out.
But first, there are a number of questions you should ask yourself.
Are they competent?
It’s a very different process from a family succession scenario.
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 a buy-out?
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 about 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 an internal 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. We use and recommend the REACH platform to help you spot potential issues early and defuse them through education.
IF YOU ARE LEAVING MONEY IN THE BUSINESS – YOU MUST PROTECT YOURSELF!
Whatever you decide, the advice our advisors can provide 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.
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