Exit Planning Tips
Selling a Human Resources Business
The decision to sell your human resources business isn't something that should be taken lightly, especially these days. If a business exit is on the horizon, you'll want to check out our suggestions for staying ahead of the market.
In a down economy, many human resources business sellers wait to list their businesses until they see signs that the economy has rebounded, making it difficult to accurately evaluate the number of human resources businesses that are actually for sale.
Fortunately for sellers, forward-thinking entrepreneurs continue to be attracted to human resources businesses that exhibit strong financials and potential for future growth.
Pros & Cons of a Sale to an Employee
Employee sales have pros and cons. A faithful employee may have the motivation and ability to continue to operate the business. Since the worker already knows the ins and outs of the business, due diligence should be a breeze, not to mention the fact that you won't have to wait months or years for the right buyer to emerge on the open marketplace. Yet most employees lack the means to buy their employer's business at or near the asking price. A seller-financed deal may be necessary unless the employee has significant assets or investor backing.
Post-Sale Details
Due diligence has ended and you're ready to close on the sale of your human resources business. All that stands between you and the sale proceeds is a few signatures, right? Not so fast. The transition to the new owner, the distribution of sale proceeds and other issues can weigh heavily on sellers. Ideally, these and other post-sale details should be addressed early on. But if you haven't dealt with them yet, it's important to have a frank conversation with the buyer, your broker and other professionals as soon as possible.
Average Timeframes
Hoping for a quick human resources business sale? You may be disappointed. Although asking price and other factors contribute to sale time, it's difficult to predict how long your business will be on the market before you locate the right buyer. Before you can list your human resources business, you'll need to invest as much as a year in preparing it for prospective buyers. Even though it's conceivable that an attractive opportunity could sell in weeks, an immediate flood of offers could indicate that the business is underpriced.
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