The Exit Strategy Handbook — Chapter 9; Management and Employees Checklist

The Exit Strategy Handbook was published by my firm in May 2013. This book is as advertised “The BEST Guide for Selling Your Business”. This blog is the ninth of a series that walks through the journey of a successful exit and identifies the team, actions and process to achieve all of your life goals that resonate within you as a business owner. The following are excerpts from Chapter 9:

Key People – Key personnel and management are often one of the most important assets of the company. The buyer will want to see detailed and current resumes on these people in order to assess which, if any, of these employees will be given an offer to continence with the buyer after the close of the transaction. In addition to current resumes it is important to provide current compensation, bonus packages, employment contracts, buy-sell agreements, documentation of any oral promises or contracts, and any equity compensation packages.

Directors – Document the names of any members of a Board of Directors or an Executive Committee, including any form of compensation including stock options, equity options, trade outs, or any types of promised compensation.

Employee Manual – Provide a copy of the company’s latest employee manual, including any important policies and procedures that are not included in the manual This documentation should give the prospective buyer information on all benefits of the company, such as vacation and sick leave, Family and Medical Leave Act benefits, jury duty, military leave, leave of absence, health insurance, retirement plan benefits, workers’ compensation, disability or life insurance benefits, etc.

Contracts – Many closely-held companies have written or oral contracts with employees. You might want to discuss this topic with your attorney if any important oral contracts are in place at the time of this due diligence process. Contracts with employees might include commission plans, consulting agreements, confidentiality and nondisclosure agreements, compensation agrees, etc.

Benefit Plans – All buyers will want to see the details about any and all benefit plans the company has for its employees. The business reason for this information is to allow the buyers to see if their current benefit plans meet or exceed the plans of your company in the event they want some of the employees to continue with them after the close of the transaction.

These are just a few excerpts from chapter NINE which are a good catalyst for you to continue your planning process of a successful exit from your business. To view our brief 6 minute video on The Exit Strategy Handbook simply click:

If you are an Entrepreneur/Business Owner who desires to grow, increase your cash flow and excel in your business and personal life, please contact me for a no-charge, no-obligation Discovery Analysis to discuss your needs, wants and expectations for your business.


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