Whether you are planning to sell your company to an outside owner (third party sale) or a family member or key employee (relationship sale), your key managers and employees are essential to the future success of your business.
But what exactly does this mean?
It means you must assess and identify which of your key employees are essential? Who do you need to lead and run the business? Then it is time to look at how to keep these key employees involved in the business after you are gone.
The most common way to do this is to offer some sort of incentive to the key employees who are essential to running the business, especially if some of these employees could be potential owners one day. Keeping them invested in the business as if it were their own, builds commitment while building capability to run your business profitably and sustainably.
Talk to your financial advisor to learn about the use of benefit packages that favor your key employees. These plans are designed to keep key employees on board, giving them the opportunity to act like owners without having to share the equity of your entire company.
The main benefit of these benefit plans is that you can design it however you feel is best for both your company and your exit. This means that:
- You can choose the employees you wish to keep on board.
- You can design the plan so employees who leave the company will no longer receive the benefits once they exit.
- You can make it so the financial incentive they receive goes towards them becoming an owner of the business.
The key is to provide sufficient incentive to keep them from running to another career opportunity. There are some very creative ways of doing this, and it’s worth investigating. Your key employees are the people who will keep the business profitable and keep the value high, whether a third party owns your business, or your employees buy you out. Keeping them happy and committed to your business is important.