Selling a small business can be tough. One of the biggest obstacles to a successful business transfer is the lack of a strong team. Without a competent and reliable team buyers may hesitate to invest in the business. Owners should focus on building a workforce structure that can help drive the business forward. Potential buyers will be interested in investing in a stable and engaged workforce and profitable operation.
Identifying and Filling Gaps in the People Infrastructure
Before selling a business, it’s important to identify any gaps in the people infrastructure and take steps to fill them. One way to do this is by conducting a thorough evaluation of the current team. This can involve analyzing employee performance, identifying skill gaps, and determining whether there are any critical roles that need to be filled.
Once these gaps have been identified, it’s essential to take action before putting the business on the market. Important actions involve reboarding existing positions to update roles and expectations, providing additional training and development opportunities for existing team members, and where necessary, hiring and training new employees.
It’s important to keep in mind that filling human capital gaps may take time, so it’s best to start this process well in advance of planning to sell your business. Your people infrastructure will be strong and stable before potential buyers begin to evaluate your company.
The Risks of a Weak People Infrastructure
Without a strong people infrastructure, a small business can be a house of cards. It may appear to be stable on the surface, but with a single gust of wind, it could come crashing down. If key employees leave or are unable to perform their duties, the entire operation can suffer.
This can be especially problematic when trying to sell the business. A potential buyer may see that the business relies heavily on one or two key employees, they will wonder if these employees may decide to leave after the sale. Without proper preparation, such as ensuring leadership is prepared and on board, strengthening of the business processes, and updating individual roles and contributions, owner dependency, and an updated org chart, a business will appear less attractive and often owners are challenged to get the offers they desire.
A Strong People Infrastructure as part of preparation for sale
A strong people infrastructure includes a team of skilled, engaged, and dedicated employees who are capable of running the business effectively and efficiently. This team should be able to handle day-to-day operations, manage customer relationships, and drive growth. Essentially, the business is designed to succeed without the owner at the center of the operation, the client relationships and revenue generation. Instead, the people infrastructure is made up of business contributors that lend the full scope of their capabilities to ongoing growth.
Buyers want to feel confident in both financial capital and human capital. A solid people foundation is a value driver and your best competitive advantage in a go to market strategy.
Time to Invest in Building a Strong People Infrastructure
Creating a strong team takes time and effort, but it’s worth it for any successful business. Investing in the right people pays off in the long run. It’s also important to provide training and development programs to help your team grow professionally.
By building a strong team, small business owners can set themselves up for success when it’s time to sell their company. Prospective buyers will be more interested in a business that has a competent and dependable team in place.
Selling a small business can be daunting to owners, especially if you lack leadership and a strong team. It’s crucial to find and fix weak spots in your team infrastructure. Having a trustworthy and fully engaged workforce is the key to setting your business up for success. By investing time in getting your workforce ready for the future, you make your business more appealing to potential buyers and ensure its success even after the sale.