Is this a reasonable and effective transition plan?

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May 13, 2021

by a searcher in Boulder, CO, USA

I'm closing in on an Asset Purchase Agreement and need to propose a transition plan. The seller appears willing to be available as much or as little as I'd like, however, I'm concerned that having the prior owner in the building for too long could lead to confusion amongst the staff on who is leading the company as we move forward. I may be overthinking that aspect, and so it may be best to just have him in the office full-time for as long as possible. My first draft, though, is for him to be full-time the first two weeks, and then gradually removing himself physically from the office while still being available to discuss transition matters, meet customers/vendors, etc. There is a solid team in place to handle sales, customer orders, project management, etc, and it is not a technical or highly complex company, however, some of the key customers are school districts and universities which have complicated hurdles to sell into and some manufacturers they represent are high-maintenance. Here is my first draft, and appreciate your feedback!

Week 1 - 2:  5 business days a week, 9-5, Either in-office or customer/vendor site.
Week 3 - 5:  3 business days a week, 9-5, Either in-office or customer/vendor site.  Pre-scheduled phone/video calls up to 2 hours on alternate days. Week 6 - Seller's vacation Week 7 - 9:  2 business days a week, 9-5, Either virtually, in-office, or at customer/vendor site on Purchaser's determination. Pre-scheduled 2-hour phone/video calls 2 days a week.
Week 10-13: 1 business day a week, 9-5, Either available virtually, in-office or at customer/vendor site on Purchaser's determination. Pre-scheduled 1-hour phone/video calls on 2 days a week. Week 14-52:  Seller available to answer questions via phone or email.  Emailed questions to receive a response within 24 hours.  Pre-scheduled 1-hour phone/video calls every other week (flexible for vacation time).

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commentor profile
Reply by a searcher
from National University of Ireland, Galway in Seattle, WA, USA
I suggest that time is only one factor and maybe avoids the core issue, which is who is running the company. I woud make if crystal clear what (if any) authority the old owner has. I woud do that in a very respectful sense. I would indicate that the has free roam to make suggestions and should be asked for suggestions, but makes no decisions. I tried this in a founder situation, and it worked very well. Folks wanted to approach the founder before this clarification, but were afraid of his presumed authority. When it was clarified that his authority was zero but his availability for advice was encouraged it worked out very well. I suspect new owners sometimes have an exaggerated fear of the old owner and it can be destructive.
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Reply by a searcher
from University of Texas in Houston, TX, USA
Seems like you’re boxing yourself in for no reason. You don’t quite know how long you’ll need the services, right?

Since you have a flexible seller, why don’t you just state the maximum amount of time you want any particular service, then have the option of cancelling each service whenever you’re comfortable - eg, seller comes in to the office or customer site up to 5 days a week until week 14 or buyer cancels. 24 hour email response until week 52 or until buyer cancels.

Look up “transition services agreements” - this is a common structure.
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