If a third party sale isn’t on the cards, a Management Buyout could be a great alternative option for your succession plan. What a great scenario – selling to the team you have built who you know and trust. So what can go wrong?

• Money!

So you know what price you want for your business but does your team have the money. The common answer? No. Most people have mortgages, car finance and all sorts of other things going on in their lives which means raising money to put into business is much more difficult these days.

The solution? Consider perhaps a full or partly vendor-funded management buyout as a possibility.

• The Process

So even if the team can raise the funds, the process itself can be complex particularly for your team. To start with you and your team must be clear on how they will be taking it forward. Is there a clear leader, will they share the equity equally, or perhaps you are concerned that one of them isn’t “pulling their weight”. They will, of course, need professional advice.

• Price

Selling to your management team is a very different mind-set to selling to a third party. Have you agreed the price to be paid and the terms of payment? Your expectations may well be different to theirs.

• Distraction

While negotiations are ongoing the business still needs to be running smoothly. Care will be needed to ensure that both you and the team remain focussed on the “day to day” otherwise the business may suffer.

• If it all goes wrong…

What if the process is ultimately unsuccessful: perhaps you simply cannot agree on the price and payment terms. Your team will be deflated – as will you. An alternative plan to exit your business may then be much more difficult.

For further information please do not hesitate to contact an Everyman Legal Solicitor on 01993 893620 or email everyman@everymanlegal.com