Finding the right exit strategy for the business you have passionately and diligently built up over time is not easy. However, as a small business owner, it’s never too early to be planning your exit.

There is a lot to think about which is why Business Gateway always advise mapping out your exit as early as possible primarily so you don’t hang on too long and miss the best opportunity. This isn’t easy when the business means so much to you and you’ve worked through all the highs and lows that come with a small business.

However, while there are lots of moving parts in a sale it is vitally important that the company’s talent is managed throughout the whole process. Any hint of a sale will unsettle employees and is likely to impact on performance if it’s not managed properly which is a problem when you are trying to sell the business based on performance.

So we thought we’d look at a few areas that link to the personnel within a business in relation to a business sale to ensure you get the deal you want.

It’s never too early

As a business owner there is a strong chance you will be selling the business at some point.Anyone taking on a role with a start-up will also be aware that at some point in the future the business will be sold. So when you are recruiting the top talent, particularly at a senior level, that you know will help take your business to the next level think about what you could offer that will ensure their loyalty through the sale of the business.

This could be financial in the form of share options, it could be board positions enabling them to weigh in on decisions that will impact on the performance of the company and its future. However, it could also be as explicit as a ‘Restrictive Covenant’ introducing a ‘non compete’ to restrict their movements if they chose to leave.

So whether you chose the carrot or stick method to try and retain your best talent, make sure your paperwork is in order, up to date and correct before you even start talking to potential buyers.

Communication is (always) key

We seem to talk about this a lot but certainly when you are dealing with your most prized asset, your staff, there is rarely a case when there is too much communication. The best product or service in the world is nothing without the talented staff to deliver it. Many exit deals will demand an “earn-out” where a sizeable portion of the sale value is dependent on maintaining and/or increasing key sales and profit objectives. So when you are trying to sell a business and your staff have decided to down tools as they are all fearful for their jobs as takeover rumours circle then you will have a problem.

There are obviously things you can’t communicate around the specifics of any deal and there will be a timeline that will dictate the dissemination of information. However if you have made the companies intentions clear from the start there shouldn’t be any surprises.

When you are able to communicate it is vital you provide as clear and detailed information as you can. While it may seem like the press or your external stakeholders should know, it is essential your internal stakeholders know first. If they find out about the deal through the press or in feedback from their customers you will lose their trust and this may impact on the sale.

Build your management team

The sale of a business whether it is to venture capitalists or competitors in the market cannot rest upon the shoulders of one person. If the business is too reliant on the passion and knowledge of one person it becomes a less appealing proposition for any potential buyer.

If you are the leader of the business, take the lead and if you don’t have the people around you think will make you an attractive proposition then start recruiting them in. Make sure you explain your exit strategy and where you see them fitting in to the equation. It is likely you will have to incentivise this so be prepared to give away some level of control. While this may be a bitter pill to swallow it will make you a more attractive proposition in the long run and will help you achieve you goal.

Exit strategy – your people

Having an exit plan makes sense but never lose focus on the fact that first and foremost you need to build an exceptional business that brings or offers true bottom-line results; one that simply transacts better than competitors or brings truly disruptive elements to markets. Build your leadership and supporting teams around that Holy Grail business objective and the exit will take care of itself.

If you’re an early stage business interested in securing the top talent to build your business or are interested in working in an exciting innovative business, let’s talk.