Even before a creation of a business, some if not most owners create exit plans for future sale purposes. Inevitably, businesses are sold to ensure its value and growth. To be able to successfully leave a business, there must be effective communication with the right people and choosing the right people to share this information with is one of the struggles of a business owner.
The absence of good communication most likely may result for the exit plan to fail. In order to execute an exit plan, there will be a need for advisors to bring perspective to the plan. Advisors will help strategize the execution and help identify possible problems the owner may encounter while carrying out his exit plan. There are two types of professional advisors: relationship-based and transaction-based advisors. Relationship-based advisors are those who have worked with the owner for a long period of time, i.e. accountants and lawyers. Transaction-based advisors are those hired to successfully execute a specific task and leave the owner shortly after the task is completed.
Professional advisors are important for the process of accomplishing the exit plan is difficult for the owner to achieve alone. Employees and managers can not all understand the position and the decisions that the owner will have to make, only the advisors have reached that level of comprehension of the situation. To not include them in the information circle is a must to prevent any panic and unnecessary turmoil that may arise within the business due to misunderstanding of the exit plan. Allowing information to reach the wrong people may cause not just turmoil but also the sale of the business to fail. One way of securing the information circle is to set up private and anonymous e-mails and send them to the chosen few the owner confidentially trusts. Withholding information will lessen the probability for the plan to fail and increase the odds for the sale transaction to succeed.
There are theorists who have different views as to the dissemination of the information is concerned. The first half believes that information must be shared transparently throughout the entire company (to managers, employees and advisors alike). The other half advises otherwise for the reason of avoiding repercussions brought by concerns and frustrations of managers and employees. Both strategies work but letting the employees know after the sale was successfully made is much easier to handle in the part of the owner. This way, he will not have to face puzzled employees with a hundred questions to ask and some questions the owner may not be able to answer. The second strategy can be viewed as better because the owner will not have to answer unnecessary concerns and the employees won’t have feel the unnecessary panic and avoid unneeded speculations.
When sale has been successful and the exit plan on its final stage, it is the job of the owner to inform his employees of this development. To properly execute this final gesture, the owner must show honesty and stress on the positive results the sale will make to the future of the company. This outright, “business as usual”, and confident manner will put to ease any tension that may come with the change that the business will face. This way, those employees that carry vital roles in the success of the business will continue to do their responsibilities with the confidence that the company will go on with or without the original owner.
With a vast variety of businesses, the approach to executing a successful business exit plan may be different. Numerous owners face the dilemma of how to effecting this plan successfully. Strategies will vary from one business to another but one thing is imperative to ensure a successful exit and this is effective communication. Clarity and brevity of the communication plan is vital and the manner and timing as to which information is presented to the employees regarding the change the business will partake is essential to the success of the exit plan. All of the information shared on this article may help any business owners handle any exit plan with ease.