Businesses are increasingly being sold to the existing management, instead of to external parties. This is referred to as a Management Buy-Out (MBO). The principal feature of this type of sale is that the business is taken over by one or more people who already work for the business. These people will be transformed by the change of ownership from employee to owner. A process that will also have an impact on the internal culture and the employee – employer relations within your organisation. When considering whether you wish to sell your business to the existing management there are a number of important questions you should ask yourself, including:
- Is the management/the buyer capable?
- Why do they wish to take over the business?
- Are you prepared to back the management financially?