Vendors always ask us the famous question: “How long should I stay? »
The answer can be rather different based on the company and situation. Everything is possible, but this will possibly impact the purchase price. You, the entrepreneur spent years building your company, between 6 months and 2 years to sell it. The question is how long will you stay after? Well, know that there is no prescribed answer. The factors that impact include the role of the seller(s), the buyer, and his skills, but above all the intention of the parties.
Let’s go by main criteria… what is the intention of the parties – when you have an integration in the same industry, the transitions can be very short. We’ve seen 2 weeks for those in more administrative roles and 3 months for those in client relationships. When the buyer is a seasoned entrepreneur who adds to their area of expertise, the transitions can vary between 2 and 12 months – depending on the level of required to operate the business.
If the buyer is an individual looking at buying themselves a full-time job, time can be spent negotiating long transitions. As a rule, we usually see a substantial reduction in actual durations compared to what was negotiated. A real entrepreneur is going to want to manage in his own way, to make changes to the business – and often the vendor represents the past for him.
The cases where we observe long transitions (more than 12 months) that are respected and that go well are in cases where the buyer has a financial perspective and buys the company as an investment, and everything was clear from the start – the vendor remains the manager.
We prefer to see shorter transitions where both parties will want to renew their agreement to continue working together than to see periods that are too long and risk ending in litigation.