Quality employees are essential for the long-term success and growth of any business. Many entrepreneurs learn this simple fact far too late. Regardless of what kind of business you own, a handful of key employees can either make or break you. Sadly, employees that don’t care, or even worse—are actually working to undermine the business that employs them destroys a business. In short: The more you evaluate your employees, the better off both they and your business will be!
Forbes’ article “Identifying Key Employees When Buying a Business” encourages entrepreneurs to think more about their employees when considering the purchase of a business. The article states that one of the most important components when evaluating a business is investigating its employees.
Placed on the market can be critical for sellers is building a great team long before a business. There are many variables to consider when evaluating employees, such as how much of the work burden the owner is shouldering. If an owner is trying to do it all, then buyers must determine who can help shoulder some of the responsibility.
One of the first steps in a due diligence process for buyers is to identify key employees. Parker advises evaluating current benefit, but also future value and potential damage they could cause upon leaving. Wisely, he recommends a test period where you can evaluate employees and the business before entering into a formal agreement.
It’s important to remember that your employees are a huge part of your success. Sellers should be able to articulate how key employees can be replaced and even have a plan for doing so. Savvy buyers will understand the importance of key employees and evaluate them closely. It’s essential that sellers prepare to have their employees placed under the microscope.