Selling a business can be a lengthy process, there’s no secret about that. The hardest part is finding the right buyer and agreeing on a sale price – once that’s over you can breathe a sigh of relief knowing that your business is going into good hands. However, one key aspect that should absolutely not be rushed is the handover process.
Getting this wrong can set you back a few weeks, maybe even months. We understand that you may want to get your business handed over as soon as possible, especially if you find yourself in a tricky financial situation, but it’s just not worth the extra hassle if you try to speed things up.
If done correctly, the handover process can take about a month for smaller businesses and as much as 3-6 months for larger businesses. Plus, if you have a smooth handover process, you instill the new owner with even more confidence that they will be running a successful business from the get-go. Below, we’ve rounded up 7 details that should NOT be missed when handing over to new owners.
1. Your day-to-day processes
We’re going to start off easy – this isn’t an absolute essential, but your new owners will be very grateful for a full, thorough breakdown of different operations that take place within your business on a day-to-day basis. This can avoid panicked phone calls later down the line when the new owners are not sure how certain aspects of the business work. There are a couple of ways you can present these processes, such as:
- A Google drive with process documents: Having an open folder in Google Drive will allow the new owners/staff members to access these documents whenever they need to refer back to them. These documents could include processes such as staff onboarding, customer onboarding, invoicing processes etc. If you do this, it is advisable to use an email that is not your current work email in case you need to change permissions in the folder at a later date.
- Printed processes: Although less advisable than the above, hard copies can be stored in offices for team members to refer back to, rather than scanning through their emails for a link that only the senior management team can access. This is also useful for businesses that do not operate online as much or do not have access to technology during working hours, e.g. the hospitality and retail sector.
You may wonder where to even begin with noting processes down. One good way to do this is by analysing a day in your life – who do you contact? What do you start working on and how do you do it? How do you schedule meetings and tasks? Keep noting different tasks down and make process documents for whatever you feel is necessary. Some may be simple notes, such as which person to contact in the event of a new client, whereas other processes may require lengthy flow diagrams with input from different members of the team.
2. Your accounts
In order for new owners to have a clear overview of your finances, all outstanding invoices and balances with both partners and customers MUST be passed on. If you’ve been prepared from the very beginning, you will already have these sorted and ready to go, in fact the buyers will have seen them – but it’s still important to hand these over so that they have their own copies on record.
3. Information about staff
You will need to pass over the following information to new owners:
- Full names of all team members
- Their roles within the business
- Their business and personal email addresses
- Their salaries
- Details of any bonuses
- Contract length
- Any other information they should be aware of
4. Information about partners
Similarly to the above, the same sort of information needs to be passed on about your partners, as well as:
- Information about the services or products they provide
- Costs of their services
- Length of contract with them
5. Information about customers
You should make sure that your Customer/Client Relationship Management (CRM) system is up to date and easy to access, with login details sent over to the new owners at your earliest convenience. This should include information such as:
- Business they are from (if you are B2B)
- Contact information
- Purchase history
- When they were last contacted (if the CRM allows for this data)
6. Security measures
You should make sure you have collected details for all of the following (if relevant):
- Passwords: for computers, emails, tills, software you use, any other pieces of technology
- A list of who has access to the premises and how to gain access: pincodes, keys, swipe cards
- Access points within the building: if you’re in a shared office space, it’s especially important to make sure your office door is locked
- Alarm systems: is there a specific key or password needed to deactivate an alarm? Also, do you have a regular fire alarm test in the building? What time does it go off and who activates/deactivates it?
- Safeguarding information: this goes for a few different factors, such as safeguarding the physical premises, intellectual property of data on your company’s systems as well as safeguarding staff
- Health and safety information: including any medical conditions of staff that new owners should be made aware of, as well as the designated health and safety officer
- Changing protocols: you should leave information regarding how the new owners can change all of the above – who they need to contact, if there are any security questions etc.
7. Your inventory
You need to create a complete inventory of all the company’s assets – not just physical items but also pieces of software you use or different systems online, any memberships etc. Information about each of these should be passed onto new owners.
For physical items, collect as many receipts as you can – this can help with insurance if any items are damaged under the new owner’s care. Renewal dates of any subscriptions or memberships should also be noted, as well as contact details for the account managers looking after the subscription.
The earlier you can get these loose ends tied up, the better of you will be when it comes to selling the business. Given that you likely need cooperation from your accountants, management team and staff, you could meet some delays along the way, giving even more reason to prepare in advance. Start gathering this information today and you will avoid unnecessary stress in the future!