Clear communication at decision making level is essential when preparing an organisation for sale. Feelings of ambiguity, a lack of transparency and limited experience around what to expect from a change of ownership can paralyse individuals that have visibility of the sales process without being key decision makers. Providing guidance around what to expect and clarity around the challenges and mentoring of individuals who are most affected by a change of ownership, can ease anxiety within the wider management team and ensure that individuals
can
proactively prepare themselves to focus on the business rather than themselves and contribute to the sales process and beyond.
the pool of potential buyers.
Despite the strain on resources placed on the management team in a sales process, the development and mentoring of high potential individuals and successors should not be neglected but accelerated.
Identifying the drivers and motivations of key players within the business is another important part in preparing people for exit. Some individuals may make a substantial amount of money from a change of ownership and may be less interested in day to day involvement going forward. There needs to be clarity around what individuals would like to achieve for themselves and what will keep them motivated after a sale has been completed.
A clear view on how the governance model and the decision making of the management team needs to develop post the completion of a transaction is another key driver to ensuring a smooth transition of ownership. Different buyers may have different requirements for a business on that front.
Succession planning.
V isible breadth and depth within the management layers of a business not only facilitates the juggling of resources throughout the often stressful sales process, but also allows potential buyers to feel confident that the business has
strong processes for managing its senior talent and is not over reliant on a small number of key individuals. This is a particular issue in founder managed businesses where often much of the perceived value lies in having the individual physically involved in the day to day business.
Risks of losing key individuals can have an adverse effect on valuations and reduce
Developing management infrastructure Management teams that
proactively prepare for
the sales process are often clear about the reality of how they operate as a team. They have a good understanding of how sophisticated and professional their management infrastructure is, and which areas they need to develop to allow for further scaling of the business. Clarity around their governance model, clear decision making and robust definitions of roles and responsibilities can minimise distraction and ambiguities during the sales process and ensure potential buyers value the growth potential of the business. A clear view on how the governance model and the decision making of the management team needs to develop post the completion of a transaction is another key driver to ensuring a smooth transition of ownership. Different buyers may have different requirements for a business on that front. However, whatever the specific requirements, it is important that management is knowledgeable and prepared about how they would like to facilitate this transition and how they will operate within the new environment in order to achieve success.
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