For some business owners, receiving a buyout offer is the ultimate sign that you've made it -- your business is successful and profitable, and you now have the option to hand off operations to someone else while you enjoy the fruits of your efforts. But where does that leave your team?
Below, six entrepreneurs discuss the strategies they've employed to make the transition as painless as possible for themselves and their employees.
Offer performance-based bonuses.
"When I was selling one my marketing companies, my staffers were extremely concerned about regime change," says Michael Sinensky, CEO of hospitality group Funbars. Unsurprisingly, a major transition like the sale of the company can put team members on edge. That's why Sinensky offered an incentive to keep his employees working at their best.
"One thing that allowed them to look the other way was that we created new performance-based bonuses, which had sunset clauses when the transition period was deemed over," he says. "These financial incentives kept the staffers in the game even under new management."
Focus on transparency.
The hardest part for your team is dealing with the unknown. When they're not present while you make decisions, staff members have no idea what changes might be coming. The advice from Zev Herman, president of wholesale lighting supplier Superior Lighting, is simple: "Just let people know where they stand."
"Don't pretend to be omnipotent. If everyone is keeping their jobs, tell them that. If everyone is losing their jobs, let them prepare. If you don't know, admit you don't know," says Herman.
Build a game plan together.
While you might be making the big decisions on your own, you can still let your employees have a say. Krzysztof 'Kris' Garlewicz, president of wealth strategy consultant ProsperiFi, LLC, recommends giving them a voice when planning next steps.
"When making the exit from my prior firm, I asked my team to refresh their role descriptions and lay out an organizational structure," says Garlewicz. "Everyone knew exactly what their responsibilities were and where each person fit into the puzzle. Open communication and collaboration made the transition smooth as butter."
Practice efficient communication.
"We recently sold a company, and what helped was quick and efficient communication," notes Syed Balkhi, co-founder of conversion rate optimization software OptinMonster. Remember, your current team isn't the only one going through a transition. New team members will need you to be available to give them the lay of the land.
"Most people are busy and don't have time for hours of meetings. To ensure a smooth transition, I remained available on Slack to answer questions and provided screencast videos on how the product works so they could refer back in the future," Balkhi adds.
Stay on, and share the wealth.
Just because you sold the company doesn't mean you have to step down right away. In fact, you might enjoy your windfall more if you stay to see the transition through. Not to mention, this will reassure your team that you still believe in what they're doing and value the work they've done to get the company to where it is.
"When I sold my first company, we were a small, close team," says Diego Orjuela, founder and CEO of medical device firm Cables & Sensors. "Exiting the company immediately after the sale would have hurt the team members and made them feel the community we had worked so hard to build was no longer existent. The best thing I did was stay on for three years. I also shared the profit from the sale with each one of our team members."
Choose the right buyer.
"Pulling the trigger on a deal too soon can be a big mistake," notes Thomas Smale, founder of professional website broker FE International. You may be tempted by the lure of a big payday, but after spending so much time and energy building your business, you need to make sure the buyer you choose is the best for the company's future.
"If you have a clear vision for what you want management to look like after you're gone, take the time to find the right buyer. If your business requires a passive investor to allow operations to remain status quo, shop around until you find the right one. There is no one perfect buyer, but there is a buyer right for you," Smale says.