The other day I wrote a BLOG titled “Employees who Care”. As I was writing the article it made me think about the process of Buying a Business. As a buyer, how do you know that you are buying a business that has employees who care?
It’s more than likely a seller of a business will not allow you to talk to their employees until there is a bullet proof offer to purchase in place. Even then, as a buyer you may only have an opportunity to talk to key staff.
What I find is that very few buyers actually take the time to ask the seller about the employees. Take a moment to think about it – if you buy a business that has bad employees, then you will likely be buying a nightmare. You therefore want as much upfront information on the employees as possible so my advice would be as follows:
1. Take the time to talk to the seller about each employee.
2. Get a clear understanding as to each employees role within the business. How do they rank compared to the others? Have there been any problems or concerns? Are they critical to the operation of the business?
If you do uncover a bad employee and / or you are faced with the need to downsize, then have the Seller take care of that PRIOR to closing the deal. If this is not possible or the seller is unwilling to do that, then I would highly recommend that you talk to a Lawyer who has experience in employment law. You may find the cost of downsizing outweighs the return on the investment.
About the Author: Matthew Buxton specializes in helping business owners build Sellable, Financeable Businesses. He also completes Business Valuations, and helps people Buy and Sell Small to Medium sized Businesses. For more information please visit www.businessfinancecanada.com
