Transition Plan Post-Transaction

November 24, 2023

by a searcher from University of Wisconsin - Madison in Hopkinton, MA, USA

I'm creating transition plan for my electrical services business post-transaction. As usual, it occurs to me that others have likely done this and Searchfunder has become a trusted source for me to seek out information and advisers. Does anyone have templates, etc. that they've used to consider team, operations, BD, bank, accounting, etc. action steps post-closing? My list is pretty good and expanding, but it would be great to compare against others within the the community here.

Thanks in advance for your consideration.

Reply by a searcher
from Northwestern University in Chicago, IL, USA

Re: sellers -- I'd recommend a consulting agreement that outlines the key terms of their involvement (i.e. hours per week, consulting rate, roles & responsibilities, etc.). The term should be a function of their impact on the business. If they skew more on the operational / administrative end of the spectrum then under 6mo is fine. If they are integral to sales or the core offering (i.e. technical, clinical, engineering, etc.), then you might want them around for longer. Whatever you land on, I would also push for the option for you to auto-extend the agreement if needed.

Reply by a searcher
from Purdue University in Indiana, USA

Hi Nick, I sold a company I founded earlier this year and struggled with those same questions. In the end, there seemed to be too many little things to efficiently account for them all, so we mostly went in the opposite direction. We hammered out a few of the big ticket issues and let everything else fall under a $x/hr. if over y hrs./month consulting agreement for z months. It has worked out great for us.

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