How to Transition Your Clients When Selling Your Business
Selling your business isn’t as simple as handing out documents to a buyer. In fact, there are plenty of factors that you should prepare prior to the transfer of ownership of the enterprise. The key to a successful transition is making sure that each step along the way goes smoothly.
Whether your business relies heavily on a small group of clients or customers or you have a large number of loyal buyers, no one should ever be left out of the transition process. The important thing is to keep the value of your business while a new owner takes your place.
If you want to transition your clients successfully to the new business owner, make sure to follow these top tips.
Prepare a transition plan.
Like what they always remind us, “Failing to plan is planning to fail.” This means that your operations must remain business-as-usual during and, most importantly, after the negotiations. Don’t forget that while your main concern is to iron out all potential issues that might arise from a successful deal, a significant part of your transition planning will be your clients.
It is important to keep in mind that not all your current clients will welcome the change in ownership warmly. Some will hesitate, others will be worried. Therefore, in your transition plan, indicate the specifics of letting your customers understand that you value the years of doing business with them.
Schedule the announcement.
It’s only when the final signature of the deal is made that is considered the best time to announce about the successful deal to your customers. Remind your transition team to observe confidentiality to avoid the public from spreading false information about the negotiation.
Prioritize key clients or accounts about the announcement.
No one is more important than your key clients. They can make or break the post-sale momentum if they are satisfied or not with the transition. It is best to assure them therefore that the services they’ll receive will not change, if not, even improve with the new ownership.
If they have questions, keep an open line of communication so that your team can address their concerns and doubts right away. The secret to retaining them is assuring that the business will still be their trusted partner.
Inform other customers.
After informing your key clients, it’s time to focus on your other customers. Make the best out of the moment by expressing your full confidence on the new owner and how he or she can continue to grow the business.
Because not all your customers are concentrated on one channel, make sure to cover all areas where they are present. Highly engaged customers on social media can also paint your new owner’s reputation in a good light so don’t leave them out.
Keep an eye on your competitors.
Your competitors’ business intelligence teams scout for the latest news about your organization regularly. But no matter how much you try to contain the sale of your company to a few people during the initial stages of the negotiation, news of the sale will likely leak anyway.
So before your competitors’ ears start flapping, make sure to reach out to your sales team about the impact of the sale. Prepare them for rumors that will most likely derail the prospects of retaining your key clients. Let your crisis team (if you have one) or your management confront rumors right away through various channels so that clients can’t be poached by the competition.
Clear and honest communication will prevent rumormongers from “filling in the blanks” about the uncertainty of your clients’ future in your business.
Make your formal announcement as clear as possible.
A general announcement or press release is needed to formally welcome the new owner. Never leave grey areas unanswered or this can be interpreted as something that the new management is trying to hide from the public. The key to this approach is to portray the transition in a favorable light with the goal of driving value for the business through a new owner.
Set up individual meetings.
If possible, schedule meetings with key clients to ease any doubts about the sale. This can strengthen their trust and persuade them that the new owner is serious about keeping them for the long-term. Ask them about their availability so you can discuss what the transition will mean for them.
During the meeting, you may discuss about the new owner’s commitment to keeping them as clients, emphasize about the quality of product or service that will be provided, and their valuable contribution to the success of our business for the past years.
Support your staff.
Aside from letting your employees know how much of the new ownership arrangement will impact the organization and internal policies, having them develop their trust to the new owner will create a domino effect as you execute your exit strategy.
Move on with your new plans.
When everything is set, it’s time to move one to your new venture. Are you going on a two-month cruise to enjoy your retirement? Will you be setting up a foundation? Are you going to build a new startup?
As much as possible, hand the leadership to the new owner who needs to learn more about your customers. It’s time to let go and enjoy the fruits of the successful deal.
BONUS TIP: Calculate the Value of Your Business.
What’s your business value have to do with retaining your clients? It’s simple: you have to earn their trust. If you appear to be clueless about a fair market value for your business, it’s twice likely that they’ll easily lose confidence in you and eventually to your business buyer.
Your business needs to have its value unlocked before putting it on the market, but this can be a difficult and cumbersome process. However, you can utilize a variety of online tools that will help you assess your business value by generating quantifiable insights for higher ROI.
One trusted tool is The Value Builder System, which shows a scorecard that grades business performance in the 8 key drivers of value (financial performance, growth potential, Switzerland structure, valuation teeter totter, annuity-based revenue, competitor differentiation, customer satisfaction and business performance with an absent owner. It only takes 13 minutes to generate your Value Builder Score.
Take the survey here: https://score.valuebuildersystem.com/transphorm-llc/brett-pittsenbargar.
Your small business deserves to find a qualified buyer that can take care of your enterprise. While working with a business broker has its advantages, finding a reliable one is rare these days. Instead, an FSBO business can help you find a direct buyer who will ensure that he or she represents your best interest.
Direct buyers are capable of strategizing because they possess the industry knowledge, experience and excellent track record in acquiring small businesses for the most reasonable price.
Brett Pittsenbargar is a savvy business investor and turnaround strategist dedicated to assisting business owners reach their objective at every growth phase. With a background in business development and investment experience, Pittsenbargar understands that business is much more than written contracts, it is about the people working every day in the business that matter most for small and medium sized enterprises generating $1–10+ million in revenue annually. He invests in, mergers and acquisitions, growth partnerships, cash out purchases and adding shareholder value.
Consult with a seasoned business investor that has decades of experience helping small and mid-sized businesses. A business strategist who can work directly with you in developing exit strategy plans, partnering growth partnership, building shareholder value and organizing mergers is critical for your business. Contact Growth Point Holdings today to arrange a one-on-one consultation with a dedicated business strategist to start building a synergistic long-term business relationship together.
Disclaimer: This article is intended to give you general business information, not to provide specific legal or financial advice. Be sure to consult your attorney, accountant, and financial professionals for any specific questions relating to your business.