Vanessa left them to it, a bit too literally
NB names and details are fictional. Any resemblance to actual persons or events is entirely coincidental!
Background
Vanessa had built a great business in the branding/design world. The staff and customers loved her. But over time, she’d grown tired of feeling stuck there.
She dreamt of travelling the world. Vanessa had received offers to buy the business, but knew they likely wouldn’t work well for staff. Often “synergies” mean most staff lose their jobs.
She then heard about the EOT. Keeping the business intact, with brand/staff remaining. Yet still enabling her to step away, with a decent sale price. What’s not to love?!
The senior team were on board. They had some concerns about operating without Vanessa, as she’d been part of the business for so long.
Vanessa booked the holiday of a lifetime starting the day after sale. She’d see the world, in a 12 month trip with her partner. A suitable reward for her many years building the business.
She wanted to totally disconnect from work. So didn’t take a mobile, or laptop, and wouldn’t be contactable.
The team were nervous, but had been doing most day to day work for a while.
The deal was signed, everyone was happy, and off went Vanessa on her luxury trip!
What happened
There were some niggles in the first few weeks. Eg some software accounts only Vanessa knew the passwords for. The team managed to get these reset so they could have access.
In the second month post sale, the insurance renewal came through. The senior team panicked. Vanessa had always dealt with this, deemed a trivial annual thing, not worth involving others. One of the team spent some time researching to secure an appropriate renewal. Many hours on something 5 minutes of Vanessa’s time could have resolved.
In the third month, one of their big clients wanted to speak to Vanessa. Apparently a personal matter, that they’d only discuss with her. When told she wasn’t contactable, they said they’d take their business elsewhere and hung up. The team were deflated.
Then disaster struck, the office had a big IT failure. Their server died, with all the files on it no longer accessible. This wasn’t something the team had ever got involved with before.
The business’s IT support was provided by a close friend of Vanessa’s. The senior team think he was called Dave, but had no contact details, or knowledge of him beyond that.
Like the insurance, but worse, none of the team had any idea what to do. They spoke to a couple of local IT firms, who asked whether they had offsite backups that could be restored. They simply didn’t know. Vanessa would know, or at least have Dave’s number to get details…but they had no way of contacting her/him.
This wasn’t what they’d signed up for. They just wanted to do great design work!
The team simply didn’t have the information to deal with issues like these. Sure, with hindsight, they should have established some of these answers before things went wrong. But they’d never been involved in that side of things.
With most of their business and client data lost, no idea if/where they had a backup, or how to access it, they didn’t know how to continue. The business collapsed.
What she could have done differently
We understand the desire to switch off completely from work. But to do it so soon after sale, and for so long, is dangerous.
She could have taken a mobile with her, and instilled a few “rules”. Email her for minor queries. Call only in an emergency.
Things like the insurance and grumpy client, Vanessa could have responded when convenient. Perhaps within a week. This could have saved a lot of hassle for the team.
The IT was an emergency, so warranted a call. In an ideal world the team would have known where back-ups are, how to restore etc.
Where that wasn’t the case, if they could have called Vanessa, she could have forwarded details of “Dave”. He could have got them up and running again, then discussed long term solutions.
Yes with an EOT transfer you’re selling the business. In some respects you are handing over the “problems” that come with it.
But if the business doesn’t continue successfully for a while, you won’t get paid. Hence it’s vital you ensure a smooth handover.
Moral of the story
No matter how well prepared you think your team are, things will crop up. In a small business, these may be things only you have experience of. You can try to plan, put in place policies/guides, but even the best plans will have gaps. Unexpected issues will crop up.
Ensure at least one person in the firm takes responsibility for and understands every part of the business. Even then, we’d recommend you be contactable for at least a year post sale.
Other Go EO founder flops:
- Greedy Greg
- Generous Jenny
- Controlling Connor
- Premature Pete
- Terrified Terry
- Tracy’s Terrible Trade Sale
Summary
Whilst an EOT can be a great way to enable founders to cut down their hours massively and step back from the business, don’t disappear completely straight away.
- Especially in small businesses, there will be things nobody else does.
- Planning is great, but you can’t possibly consider everything.
- Unexpected issues will arise. Some of those may NEED your input.
- Until you’re paid off, you’ve got a lot to lose if the business fails.
- Even competent staff will have things they’re unable to deal with.
- All business sales typically require you to be contactable for a while.