When you started your business, you dreamed of one day profiting from it. Your goal was to grow it and then sell it for a profit, and now, you are finally nearing the realization of your dream. But what comes after the closing?
Very few business owners take the time to consider their exit strategy and then find themselves pressured at the last minute to make a decision regarding how they will leave their companies. In almost all cases, selling your online business includes a transition period of three to four weeks where you train and transition the business to the new owners. This transition time is included in the sale price of the business. After that, there are a few different options for your exit strategy. By spending time thinking about your options now, you can be in the best position to make the right decision for you and for the buyer. There are two main arrangements that may take place in the next phase after a sale:
- Contract Employment – In this situation, the buyer offers you a temporary position at the company after the transition period and pays you in return for your services on an ongoing basis for a set period of time. This can be beneficial for helping to ease clients or customers over to the new owner and to help get any employees that you have on the same page before you depart; however, you may find it unnerving to suddenly be an employee in your business rather than the boss.
- Consulting Agreement – With a consulting agreement, you are not an employee of the company. Instead, you work as a trusted adviser to the new owner, providing recommendations and feedback as needed. Consulting may continue on for years at a time, but you may not see steady income. Still, if you are planning to start a new venture, retire or work for a new employer, a consulting arrangement may be the ideal solution.
No matter which exit strategy you choose, be sure to carefully read all of the contracts and documents that spell out your role before signing them. It is also wise to have them reviewed by an attorney.