One of the buyer’s biggest concerns when taking over a business – according to Zoran Sarabaca - founder of Xcllusive Business Sales - is that business performance will continue. 

The seller can help alleviate this concern by creating a quite simple handover process. This will not only increase buyer confidence but could help the business owner sell quicker, for a higher price.

Source: Xcllusive Business Sales

The chart shows the current owner in red on the left-hand side, and the new owner in green on the right. The process progresses in four stages.

The first stage involves the new owner getting familiar with the business. Next comes some training followed by the actual handover. Following the handover, the former owner might still be offering some assistance to the new owner.

“As you can see in the chart, whilst the new owner is getting familiar with the business, the current owner continues to run it 100%. However, when the training period starts, the seller starts to reduce his or her involvement with the business, whilst the buyer increases their involvement,” said Zoran.

This pattern continues until total handover is reached.

“Offering continued assistance for an agreed amount of time after handover really boosts buyer confidence. Whilst you’re not directly involved in the business anymore, you can make yourself available to answer any questions the new owner may have.

“This may continue for 6-12 months so you should charge for your time at the appropriate rate.”

Zoran recommends creating a handover checklist.

“In that checklist, you write down everything that the new owner needs to know to run the business. That could be anything from an introduction to suppliers and customers, pricing, quoting, systems, procedures and so on. Then you can just tick items off as you go through them with the new owner,” Zoran said.

“If the checklist has been done properly, by the end of it you will have passed on all of your knowledge of running that business.

“This process can take around four weeks for smaller businesses, and 3-6 months for larger, more complex businesses.”

You might wonder why you should follow this process, rather than simply leaving it to the new owner to ask questions.

“If you have a good handover process in place, you will increase the confidence of the buyer to successfully run the business. And if you increase their confidence, it is far easier for them to make a decision to buy your business,” said Zoran.

“This simple process can make selling your business so much easier and could result in more money in your pocket.”

More from The Business Conversation:

It’s tax time 2020: Tax Office toolkit offers support for small businesses

Victoria announces $5 million fund to support regional tourism businesses

New research forecasts sweeping global workplace change post-pandemic