So you are in the process of buying a business, or may have already done so. You are completely excited to get busy with the business. You have all kinds of wonderful plans and have a vision of what the business will look like under your ownership. It is all great, but there is one problem: like most business buyers, you probably have no clue how to run the business. That is why it is so important to have a proper transition period from the new owner to you.
Whenever I buy a business, I want to get the former owner out of the way as soon as possible. However, that is NEVER done before I have tapped their brains for as much operational information as possible. Certainly, a new owner has to make the business their own, but the prior owner has a lot of intellectual know-how to share even if you believe they were not necessarily a good operator.
There are all of the minor things a new owner has to learn (i.e. turning off the alarm) straight through to the “big picture” areas such as marketing, growth, client and supplier relationships, etc.
As you consider the purchase of a particular business, a buyer must compile a list of every item that needs to be covered during training as you learn more about it.
This way, you can have an idea of how long a training period may be required. Then, set out a training schedule by week of all areas to be covered with the owner.
This way, you will not only be certain you have enough time, but you will also be assured of covering everything.
One aspect of the post-sale training where I see too many buyers make a critical mistake is in their negotiation of how long the former owner will stay and the costs for hem to remain to train.
It is common for a seller to provide a few weeks of free training.
Sure, in a sandwich shop two weeks or so may be sufficient, but in a more complex business, you may need a month or even several months of training. However, many business buyers make the mistake of being “penny-wise/pound foolish” and trying to cram in all the training into the period where a seller is providing the free training.
Don’t make the same mistake!
Whatever period the buyer feels they need for training and triple it.
For example, if a buyer believes they need one month, negotiate three and pay the seller for the additional time. The best way to do this is agree with the seller on a free period of training and then the buyer should have the option but not obligation, to have the seller remain on board for x period of time for additional training at an agreed upon fee. Additionally, negotiate a post training hourly fee with the seller so that if you need them for anything, they will be willing to assist you and know they will get paid.
The buyer must also retain the right to terminate the arrangement at any time.
This way, as soon as the buyer feels comfortable and confident, they can advise the seller accordingly and not incur any more costs. At the same time,