09 Nov What will the business earn after you leave?
Your business may provide you with a good income, but the question is what it can provide the person who takes your place?
Financial records establish the earnings history. Understanding how those earnings will carry forward requires a closer look at the work you do, the people who produce the revenue, and the arrangements a buyer will inherit. At Sam Goldenberg & Associates, we help owners connect that history to a practical ownership transition.
Start with the work you leave behind
An owner’s responsibilities often extend well beyond their job description. You may manage the books and supervise employees while also filling gaps in production, handling the largest accounts, or covering shifts when someone leaves.
Consider a plumbing company whose owner describes her role as primarily administrative. After losing an experienced plumber, she began spending two days a week in the field. Revenue held steady, but the staffing situation changed. A buyer will need to perform that work, hire someone to do it, or accept a reduction in capacity.
The same applies to the administrative work she handles between service calls. A buyer who takes over her field schedule still needs time to prepare estimates, manage employees, and keep the business running.
This is why we ask owners how they actually spend their time. The answer helps us understand what a buyer can reasonably take on and which responsibilities will require additional help.
Know whose income the buyer is replacing
A different question arises when an employee or contractor produces a substantial share of the business’s revenue.
Suppose a millwork shop relies on an experienced production manager who also estimates projects and maintains relationships with several large customers. A qualified buyer might be able to assume that role. In that ownership model, the manager’s compensation could become available to compensate the buyer for doing the work. In essence, the buyer will replace this production manager.
But that outcome depends on a workable handoff. Will the manager leave at closing, remain through a transition, or continue indefinitely? Can the buyer perform all of those duties while managing the company? How will the customer relationships transfer?
If the manager stays in the same role, the business continues paying for that work. If the manager leaves, the buyer needs the skills, time, and customer introductions necessary to take over. If the buyer hires a replacement, that compensation belongs in the operating plan.
Each arrangement produces a different picture of the buyer’s income. We need to understand which arrangement supports the asking price and how it can be put into practice.
Give the buyer time to learn your business
After years of ownership, much of what you do feels routine. You know the employees, the customers, the software, and how to handle exceptions. That familiarity can make it easy to underestimate what someone else needs to learn.
A qualified buyer may be able to begin providing services immediately. Running the business while delivering those services is a larger assignment. The buyer must learn how work is scheduled, how employees divide responsibilities, how billing is handled, and which customer relationships need personal attention.
Experience matters, too. A first-time owner may bring strong technical skills while having limited experience supervising employees or managing daily operations. A transition that works for an experienced operator may leave that buyer without enough support.
When the asking price assumes the buyer will immediately replace someone’s production, the handoff deserves particular attention. Starting work on the first day and sustaining the income shown in the financial model are separate milestones.
At Sam Goldenberg & Associates, we work with sellers to define the responsibilities being transferred and the support a particular buyer will need. That gives both parties a clearer basis for agreeing on training, introductions, and the seller’s availability after closing.
Address the conversations that shape the outcome
Owners understandably worry about discussing a sale with key employees. Confidentiality matters, and premature disclosure can unsettle a team before there is a transaction to discuss.
At the same time, a sale may depend heavily on a particular person staying, leaving, or accepting a different role. Until that person’s intentions are understood, part of the transition remains an assumption.
We work with sellers to identify these dependencies and plan when and how they can be addressed. The appropriate timing will vary with the business and the stage of negotiations. A carefully arranged conversation during due diligence may resolve a question that neither financial statements nor the owner’s assurances can answer.
A seller’s confidence that an employee will cooperate is useful context. The employee’s own willingness to participate is stronger support for the plan.
Use preparation to support your price
Buyers can recognize the value of an established business and still have questions about the income available under their ownership. When an asking price depends on a particular transition, they need a credible reason to believe it can happen.
Preparation helps provide that support. Document your responsibilities, identify gaps in staffing, and understand which relationships need a handoff. Establish what equipment or training the next owner will need. Where possible, allow enough time to demonstrate that the business can operate successfully with less dependence on you.
These steps can also reveal strengths that deserve more attention: employees who already manage daily operations, customers served by several team members, or procedures that allow work to continue when someone is away.
At Sam Goldenberg & Associates, we help sellers examine these questions before they become obstacles in negotiations. A clear picture of the next owner’s responsibilities and earning potential helps us present the opportunity, evaluate buyer fit, and work toward a sale supported by a practical transition plan.
