Transition and Support when Selling or Buying a Business
Transition and Support when Selling or Buying a Business
Here are some tips you want to take into account after the completion of your business sale. In order to make for a smooth transaction, you want the handover and transition period to be as smooth as possible.
- How-To Documentation
First, you want to prepare some documentation on how to run your business. This includes material on how to run your business. We recommend creating a FAQ. These are questions you know they will ask. This will save you enormous time when your new buyer asks you questions. The more detailed your documentation is the less involved you will have to be. Make your documentation so simple a child can read the manuals and understand how to run your business.
- Dropbox Folder
Create a nice, neat dropbox folder with graphics, videos, content, creatives that they can use. Neatly mark and label all folders and files for a buyer to be able to take advantage of marketing materials, business materials, etc. along with documentation on how to use each piece of material.
You’ll want to have a contract drawn up by a professional (most often an attorney) that solidifies the agreement between you and the seller. This is often called an Asset Purchase Agreement to explain the particulars of your agreement. Are you doing an all cash deal? Seller financing? A mix of upfront money and earnout money? How long will you stay on for? Are there any restrictions on the assets that you want in the contract? One of the benefits of using JARBLY Acquisitions to help sell your business is we draw up an Asset Purchase Agreement for you.
- Financial Details & Delivery of Assets
On the day of your closing, make sure you understand the escrow process. You’ll probably want to receive some money upfront. At JARBLY Acquisitions, we typically construct deals where the buyer pays half upfront, and the other half remains in escrow. Upon completion of all assets, the remaining monies are delivered to the seller. For online businesses we use a secure escrow account service. For brick and mortar businesses either the buyer or seller will choose the title company depending upon the county.Make sure that all assets are delivered within a timely fashion based on your agreement. At JARBLY Acquisitions we typically draw up the agreements to allow enough time for the transfer which could be as short as 10 days or up to several months if you are transferring many assets. If you are transferring websites to different hosting services, call your hosting provider in advance so they can discuss the transaction with you. Some hosting services take a long time and could take upwards of a week, so prepare in advance. You don’t want to breach the contract by surpassing the time allotted for the transfer.Create an excel sheet of all login credentials usernames and passwords for the buyer to be able to log in, however, make sure you change the passwords to something that doesn’t compromise the information you are NOT selling. Make sure that you don’t cut off payment access until the other buyer changes the card information on each of the sites that requires payment. For instance, a Zapier account should remain active at all times to allow for your business to remain functional. Any down time could give the buyer a reason to lower the asking price or withhold money which you want to avoid at all costs. try to coordinate and spend a full day with the new buyer where you can sit down in front of a computer while on the phone and change credit card information for each account.
- Transition Period
Generally a business owner will stay on for a period of time. You can either build it in the contract that you will be paid during this time period as a consultant at an hourly wage or weekly, or monthly salary, or you can include it for free as a way of incentivizing the deal to get done quicker. Often our recommendation is to provide 1 month to 6 months of training, transition, and support where you will physically spend one-on-one time with the new business owner to get them familiar. If it’s a simple Amazon business for instance, a month might be enough time. If it is a complicated financial brokerage you are selling, you might need to stay on for 6 months to explain all the intricacies and events that could take place. If you are selling a very intimate business like a medical office. Typically 3 months is standard where you can commit to something around 5-20 hours per week to familiarize the new owner with all the processes. Offer what you feel comfortable committing to. For many websites, committing to 3 hours per week for 3 months is enough time to help the new buyer grow the business. This often leads to a future of working together where the new buyer will pay you as a consultant for future work or embark on future ventures together. You want their business to succeed as you probably can sell other assets to them down the road. Aim to make this as amicable a transaction as possible
Good luck with the sale of your business. We hope you choose to use JARBLY Acquisitions if you want to maximize the sale of your business and make it as smooth a process as possible. Please call or email us at (800) 773-1523 or firstname.lastname@example.org if you need assistance selling your business faster.
- CLOSING PROCESS FOR A BUSINESS SALE
- HOW TO SELL AN ONLINE BUSINESS
- SELL A BUSINESS
- TIPS ON SELLING A BUSINESS
- TIPS WHEN BUYING A BUSINESS
- TRANSFERRING ASSETS OF AN ONLINE BUSINESS
- TRANSITION PERIOD WHEN SELLING A BUSINESS
- WHAT TO DO AFTER I SELL MY ONLINE BUSINESS