Transferring Your Business to Your Employees
We often hear owners say they want to transfer their businesses to third-party buyers when they first encounter the concept of Exit Planning. However, we’ve observed that in many completed Exit Plans, owners actually choose to transfer their businesses to employees. Some reasons for this decision include employees knowing the culture and values of the business, a desire to keep the business with people the owner knows and trusts, and employees’ inherent desire and commitment to grow the business. As owners start to consider options that include transferring to employees, they can forget to ask two important questions: 1. Do the employees I want to succeed me even want my ownership? 2. If so, how can I motivate each employee to stay and make the financial commitment? Your love and enthusiasm for your company can cause you to skip these critical first questions. What may seem like a good fit to you can lead to chaos if the most important employees (often referred to as “