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Q: I’ve been running my business for years and now want to retire and sell-up. I have a number of long-standing staff members and worry that they will think I am being treacherous. Any tips?
A: Although staff welfare and livelihoods are important, you can’t keep working just to keep other people in work. As long as you handle it in the right way, they are likely to accept you are retiring, and will be only too happy to help you on your way.
When it comes to your staff, there are three main options:
- Don’t tell them at all; this is a perfectly legitimate business decision, but given that they have been with you a long time, I am not sure your conscience will let you off lightly here. Not telling them will help ensure stability for the hotel and ongoing standards, but will likely result in a bad taste in their mouths
- Tell them honestly; everyone hopes to retire at some point and it is likely they will understand this. If you tell them your plans before taking any actions, they are likely to feel touched by your honesty. Before you do this however, have it clear in your mind what is going to happen to the business and to them and also have it clear what your expectations of the staff are. For example, explain that you want to sell, but that their jobs are secure, and of course mention how long it will likely take to sell.
- Work with them to shape the process; aside from just being honest, you can work with some key staff, or all of your staff to shape the sale process together. For example, you can look at including clauses in the sale that protect their jobs, depending on what you are comfortable with and how much you feel you owe them. It is worth remembering that your hands may be tied by the buyer or the sales process, so whatever you want to offer, it is worth running it by the agent first.
Q: I’m considering selling my business, but haven’t 100% decided. Having approached a few agents, I was astounded by the up-front marketing fees, before they have even done anything! If a buyer comes along, I wouldn’t hesitate to walk away, but if they don’t, I’ve given up my hard-earned cash! Any tips?
Agents do have a number of up-front fees which they need to cover and the marketing fees will cover this. Unfortunately, they are a fact of selling, but there are a few things you can do to minimise liability.
- Try selling it yourself; once you have a fair valuation, talk to Hotel Owner or some of the other big publications, or perhaps even your local business pages, and take out advertising to promote the sale. This will be quite a public way to do it, so you need to be committed and prepared to manage any negative publicity, loss of staff or lack of bookings. The positive side is you can manage any viewings / enquiries yourself particularly if you are confident there will be a lot of interest.
- If you don’t want to sell it yourself, or aren’t having any luck, then it is time to consider an agent; they have expertise, detailed knowledge for all aspects of the sale, experience and contacts, but you also need to pay for these. Rather than just sign a ‘standard’ contract, which will usually be weighted in their favour, discuss all aspects of the contract and negotiate on the different elements and if need be draft in a lawyer to help you develop a mutually-beneficial contract.
This feature first appeared in the April 2016 issue of Hotel Owner.
