Three Reasons Why Your Leadership Team Directly Affects the Potential Success of a Sale

A prospective buyer will be interested in the human capital that you can offer in the transition. This blog post covers three key themes related to executive leadership and how the team you build can make your business more attractive to a potential buyer.

Is Your Organizational Leadership Stable?

Remember the last time you bought a car. You relied on the dealer to sell you a vehicle that would be reliable and would meet all performance expectations that were revealed in the sales pitch. The same is true for selling a business. A prospective buyer is going to be laser focused on continuity and ensuring that the experience you’ve cultivated will transfer as part of the transaction. As you prepare to sell your business, you will want to invest some time ensuring your top leadership will stay on through the transition to create stability and seamlessly transfer the processes of your business.

Your executive team and their relationships are critical to your business success, so it might be worth investing some capital by improving compensation or offering other rewards to incentivize top leaders to stay on after the sale of your business. By having an experienced, well-trained team that knows the ins and outs of your business, you can help ensure your business won’t face any fallout under new ownership.

Is Your Pipeline Steady?

A prospective buyer will also want to take a close look at your books and feel confident about your pipeline and the reliability of your revenue forecast. It’s important to shore up your sales team and sales process well before you take your business to market, thereby ensuring your business can count on inbound profits for the foreseeable future.

It’s also critical to consider whether your involvement is directly tied to your sales operations. Ideally, your business would have a sales team that maintains direct contact with the company’s key customers and leads they’ve been trying to convert. When you have a dedicated sales team in place, a prospective buyer can take comfort in knowing that the success of winning business isn’t directly tied to your personal involvement.

Is Your Intellectual Property Secure?

We’ve talked about your top leadership and your sales team. But what is your team selling? Regardless of whether it’s a product or a service, you will need to make sure your intellectual property is secure. A prospective buyer will want to make sure they can rely on using any patents, trade secrets, and other IP assets as they take on ownership and management duties. You might also consider securing commitments from team members who lead product innovation efforts to stay on after the transaction, thereby helping to set up the next owner for success.

Selling your business involves a lot more than a handshake and payment through a wire transfer. It’s important to spend some time considering which people and teams are critical to the success of your business, and then doing what you can to ensure that those employees will stay on to help the next generation of ownership. Sunbelt Business Advisors has helped countless business owners through every step of the sales process. Contact us to learn how we can help you transition your business to its next generation of ownership.