By: Patrick Ungashick
Selling your business to an inside buyer is one of four possible exit strategies for a happy and successful exit. (Review all four exit strategies, to determine which one is right for you.) Being an "Innie," as we call owners with this strategy, can be deeply rewarding. Long-term, valued employees become like extended family to many owners. To see the business continue forward under the leadership you selected and groomed, acknowledges all your efforts and extends the business legacy. Rewards can include the financial realm-your employees may be the best, and in some cases the only, potential buyer. They know the business and would rather own it after you exit than go work for somebody else.
Despite these advantages, successfully selling to top employees can be difficult. Perhaps the biggest reason is cash; top employees usually do not have any. Another challenge for Innies is holding onto top employees until you are ready to sell. A talented, top-performing employee who aspires to be a business owner may not wait the five, ten, or more years until you are ready to exit.
In our experience, there are twelve essential conditions that Innies must meet in order to achieve a happy exit. Here is our simple NAVIX Exit Planning Checklist - Selling to an Inside Buyer, to guide you through these conditions. Use the checklist to evaluate how prepared you are, and to identify actions that will help you achieve a successful exit.