Last weekend while I was searching for a new pattern to knit a dishcloth, I came across an interesting news. Before you thought you have landed on a crafting blog by mistake, allow me to share with you how knitting and yarn fit into ‘how to sell a business’ blog. As it turns out, the great American yarn company, Elmore-Pisgah in Old Fort, North Carolina has closed down. It has been around since the 1920s and it is the maker of the beloved 100% cotton yarn, Peaches and Cream. According to a few bloggers, its Canadian rival, Lily Sugar’n Cream has bought the American company and shut it down. The crafting community was outraged and sadden by the lost of a great American company, lost of more American manufacturing jobs to an ‘evil’ Canadian rival whose product was apparently inferior. I suspect that the true story is probably far from what was circulated on the internet. Perhaps owner of Elmore-Pisgah had tried to sell the business to another American buyer but at the end the best buyer was its Canadian rival. The Canadian company however appears to have done little to communicate to its customers what has transpired with the acquisition and perhaps missed an opportunity to retain some of the loyal fans of Peaches and Cream.
The transition of a business from its current owner to a new owner is an important step that need to be approached with careful considerations. Typically the larger the business, the more critical a well thought out transition strategy should be. Some of the proven strategy include:
1. Identify key employees early in the process and inform them of the potential and reason for sale.
2. A carefully crafted and well timed co-announcement to employees, clients and vendors. Setting the communication record that business will be as usual and perhaps even better with the transition to new owner.
3. Exiting owner remain active in the business for a period of time, showing strong support and confidence to the new owner.
4. Minimize changes as much as possible for a period of time. If change is unavoidable, clearly explain the timeline, the impact and the reasons.
With careful planing and execution, most businesses will transition smoothly to a new owner.
Submitted by Siew Cheng
BUSINESS BROKER ALBERTA 