When a person buys a business, they usually recognize that getting trained to run it is important. But, it may not be given the attention and importance that it should. If you are buying a business, here are some things to remember when you are working out the training with the seller.
Discuss what training you need and how it will be given during your discussions with the seller before you make an offer. This issue is frequently given just a token discussion. Many times, it just revolves around the amount of time the seller is willing to provide. A meaningful discussion should include what the training should consist of. By breaking down the training more, both parties will be able to come to a better estimate of how much time is needed and what the training should consist of. The buyer of the business will also get a better understanding of what the seller does in the business and what the buyer needs to do to replace the seller.
Working out the training is not usually an adversarial discussion, but rather figuring out what works for both parties. Both parties usually have a strong interest in the buyer succeeding in the business. But, most sellers are selling for personal reasons and want to move on to the next phase in their life as soon as possible. They want to give the needed training, but make it as short as possible. For this reason, unless the training is only a week or two, the buyer should be sure the seller is compensated adequately so the seller is happy to stay on and provide the training.
The amount of time a seller should remain at the business to train the buyer, and the compensation, should be part of the offer the buyer makes. If the parties have discussed the training before the buyer makes an offer, then agreeing to the offer should not be unduly delayed by working out the training. And, the proposed training should be closer to what the seller will accept. At a minimum, the Letter of Intent or Purchase Agreement should state how long the seller will remain to provide training, compensation, and during what hours. The amount of off-site support – typically by phone or email – after the initial training should also be worked out. It is common for sellers to provide the off-site support at no charge if the amount requested is minimal. If the initial training is adequate, the off-site support needs should be minimal.
During the period of time between the signing of the offer and the closing, the parties should work out the details of the training. Creating the training agenda will make it more likely that the training will cover the information that the buyer needs to learn the business.
There are some things that a seller can do which will not only make training much easier and better, but also make the business more saleable. This is to systematize the business as much as possible, write the system procedures into a manual, and develop a formal training program for new employees. This is typically done in franchise businesses and is a reason that buyers find these businesses attractive.
Systemized processes make finding employees easier, their training better, and provide consistency to the products and services the business provides. McDonalds doesn’t look for people who know how to cook hamburgers, they look for people who can learn the McDonalds’ way of cooking them. The same practice can be applied to many of the processes in any business. Once the system is developed, it should be easy to write the steps in the process down and train people how to do them. Even though the buyer is managing the business and may not be “cooking the hamburgers”, the buyer should know what each of the important jobs in the business entails.