Post-Sale Employment: How Long and In What Capacity Do You Want to Hang Around?

You feel strange and unsettled, as you peer through the window of your corner office at the street below. You owned this place for decades - the good and the bad. It was your wizardry that secured your first purchase order from a Fortune 500 company. You had no business getting awarded that contract, but you did it. It was also you who years later maxed out your personal credit cards and took out a home equity loan to make payroll when a business deal went wrong. Those highs and lows were a part of you.

Now it’s all changed. You closed on the sale of the company a month ago. You have the same office, but a new title and a boss down the hall. It’s completely disorienting. Never again will you have to worry about payroll, but never again will you get to worry about payroll. And you have to get permission to do things now! What is this new universe?

Rather than wander into this jarring culture shock unprepared, it is important to consider how you’d like your post-sale situation to be handled. In many cases, your role will be fleshed out between you and the buyer. So let’s think about this from two specific (and potentially conflicting) points of view.

Recommended Related Read: Management Succession: How are You Doing at Replacing Yourself?

What Can You Handle?

“Know thyself,” goes the Ancient Greek aphorism. But do you know yourself? Before you knee-jerk react to the question of what you can handle in terms of working for someone else, I suggest you consult with your closest personal and business advisers, the people who know you best. They might be able to help you think this through.

Let’s take one simple example: do you keep your shop a certain way? If so, it might hurt too much to watch a new owner overhaul it 90 days post-sale. You might be better off leaving the premises post-sale, but perhaps maintaining some customer relationships or quoting remotely if that works for you.

The point here is to know your “line/s in the sand”, as this will define how far we can push with the next question.

What is Necessary to Get the Deal You Want?

Depending upon your perceived importance to business continuity, your post-sale role could become a significant part of negotiations. Even if you position yourself as unnecessary to business operations, buyers frequently request an ongoing commitment for a period of time.

Doesn’t it feel good to be wanted? It turns out, not always.

So what do you do if you feel you need to be out, but the buyer needs you in?

1. Consider all of your objectives

Consider all of your objectives, not just your goal to depart immediately post-close. The sale of your company is likely your main vehicle to achieving your retirement goals, both personally and financially. This broader perspective may help you stomach a temporary post-close employment requirement.

2. Consult your line in the sand

In order to get a deal done, you’re likely going to have to check back in with your line in the sand more than once. The magic happens when we can play the game of how close can you come to the line without stepping over. The closer you are willing to go, typically the bigger the reward. The less likely you are to send a negative signal to the buyer. If you want to get out right away, the buyer will have to ask themselves, “Why are they so eager to jump ship?”

This is why it’s important to start exploring your exit strategy long before you need to walk away. Determining your desired approach to post-sale employment ahead of time should be an important part of your exit plan. Planning in advance about how you will handle different scenarios will help you make better long-term decisions, and set yourself up now for your desired outcome, 1, 3, 5, or even 10 years down the road when the pressure of a deal is on.

Recommended Related Read: What’s going to happen to my people when I sell?

Are you thinking about selling your business? Before you start the selling process, consider doing some exit planning. Doescher Group helps business owners exit on their terms. Check us out to learn more about how we work with clients.