Seller Training - An Overview About This Provision


How’s this for a training program?

Miriam’s deal to purchase a dry cleaning company specified that the seller, Mr. Chu, would be available to answer questions for two weeks following close of escrow. Since Miriam had experience from a job in a dry cleaning establishment, she knew how to operate the equipment and deal with customers. She just wanted a few pointers about things that might be specific to the company she was buying, and she wanted the seller to handle a few introductions to some of the clients and suppliers. She got more than she bargained for.

For months afterward, Mr. Chu still showed up every morning when Miriam opened the door, and lingered in the establishment till the middle of the afternoon.

"I felt sorry for him, because he had nothing else to do," she explained. And Miriam reports he was quite happy when she started giving him assignments, such as covering for her at the front counter while she ran errands.

This assistance, at no cost, for an extended period following close of escrow is not typically what a buyer can look forward to. More likely, the seller will strictly adhere to the terms of the training agreement and will be glad when it has run its course--meaning that he or she no longer has any responsibility to the buyer.

WHAT THE BUYER NEEDS

There is no standard for a training agreement in a business buy/sell contract. The duration and particulars covering this service provided to buyer by seller are as varied as the individual circumstances of each party’s situation. But as the purpose of the training program is to make sure the buyer is successful in the business--which is in the interests of both sides to the deal--the program should be designed to serve this end.

Many training pacts are based on the assumption that the buyer’s need for information and advice will be most critical right after the company changes hands. That need will most likely decline after a few weeks, as the buyer learns the business operating procedures and gets to know the employees, key vendors and major customers.  Following this principal, training agreements usually call for the seller to spend time a few hours every week--maybe every day at first--with the buyer, until much of the basic information about running the business has been passed along. This initial period might require the seller to be on premises for a while.

A typical program will specify a period for the buyer to receive the most concentrated part of the training to start. That might be defined as a few days or several weeks, depending on the complexity of the business and the experience of the buyer.

The training period or periods that follow, calling for less seller involvement, should also be defined as to length and means of communication. The seller might, for example, be required to provide a “second phase” of training for a period of, for example, six weeks. Typically, the agreement will call for this part to be handled in phone or email conversations and there often is a limitation of, say two or three hours per week. The appropriate subjects for these interactions have to do with problems the buyer is encountering that were not discussed during the initial training period.

If the buyer wants the seller available to answer questions for up to six months or more after close, and if the seller is in accord with this, the fact should be spelled out in the training agreement.

IF THERE ARE PROBLEMS

While most sellers will object to being called on by the buyer to answer questions and to help solve problems after completion of the training program, the smart seller usually will cooperate with the request, at least for a few weeks. It may be annoying for a seller to continue getting calls, but it is easier and less costly than responding to a formal accusation--perhaps in the form of a lawsuit--claiming that the seller has not provided the buyer with the information and advice needed to be successful in the business. And the seller can always consult an attorney, if the buyer’s need continues well beyond the contractual period.

About the Author:  Peter Siegel, MBA is the Founder & President of www.BizBen.com (7000+ California businesses for sale - 200 new listings added daily) & the Director of the BizBen Network - a California alliance of 16,000 business buyers, 4,000 small business owners, 1,800 brokers, agents, intermediaries, and 600 advisors/resource providers. Since 1994 BizBen.com and the BizBen Network have provided business buyers, owners, and intermediaries a clearinghouse of information on buying and selling California small to mid-sized businesses. For more information about BizBen.com, joining our Network or for a free consultation phone Peter Siegel direct at 925-785-3118.

Categories: Deal And Escrow Issues, How To Sell A Business, Selling A Business


Comments Regarding This Blog Post


These are great points. One thing I would recommend is that training takes place AFTER the close of escrow. A buyer may be tempted to want to start their training as escrow nears a close, and a seller may want to start early, because the faster they do training and escrow closes, the sooner they are out the door. The mistake that takes place on doing training BEFORE the close of escrow is that the buyer and seller could get in a fight or the buyer could become overwhelmed and want to cancel the deal or re-negotiate the price, because business was slow that week.






  Helpful Resources To Assist In Selling And Buying California Businesses
Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

William F. Ziprick, Attorney: Legal Services For Buyers And Sellers

Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.

Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Shalonda Chappel: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

Brad Steinberg, Business Broker: Laundromat Specialist

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
5 Myths About Selling A California Business: Best Tips For Sellers & Brokers

Peter Siegel, MBA (at 925-785-3118) - BizBen Director discusses myths associated with the process of selling a business and some of them can actually cause deals to fall through. Don't let your sale be comprised, be aware of these common misconceptions related to the process of selling a business.

Uncover Hidden Problems In Due Diligence When You Buy A Small Business

Most everyone who's decided to buy a small business in California knows the importance of due diligence. That involves close examination of a business prior to removing contingencies. But not everyone knows how to uncover problems that are not obvious. Here are five of the most common hidden issues.

Selling Your Business To One Of Your Employees - A Good Idea? Pros And Con

After investing years of time and talent into a company, many small business owners want to feel like they are leaving their business in good hands and for that reason, some sellers opt to sell their business to an employee. Peter Siegel, MBA talks about the pros and cons to taking this route.

Business Purchase Financing - 3 Things You Need To Know Now For Success

Looking to buy a small business? There is good news regarding business purchase financing. More financial institutions are coming back into the market with business purchase financing. After years of being selective many lenders are more open to financing deals. Peter Siegel, MBA covers this topic.

Financing Advice: Showing Add Backs To Get Business Acquisition Financing

When seeking business acquisition financing, it helps to review a seller's addbacks as a source of funding to service the debt service. But explain them correctly. Peter Siegel, MBA business acquisition financing expert and advisor at 925-785-3118 covers this topic on financing a business purchase.

Who Really Represents The Business Buyer In A Deal? Does Dual Agency Work?

Who really represents the buyer? The selling broker or agent through dual agency? Many brokers and agents weigh in on this Discussion on BizBen. Bottom line is all business buyers need to know who really represents them and has their best interest at heart when seeking and negotiating on deals.

Thinking Of Selling My Business: What Factors Create Value And Drive Price?

There are a lot of misconceptions about what enhances the value of a business. The following factors in this Discussion Post on BizBen are aspects of a business that really drives its value and pricing. Business owners thinking of selling should check these out these factors before selling.

How To Determine Whether The Buyer For Your Business For Sale Is Sincere

A problem owners encounter when offering a CA business for sale is that not all so-called business buyers are qualified to make the purchase. It's frustrating and costly to waste time showing non-qualified buyers the business. Here are ways to identify time wasters so the focus is on real buyers.


Escrow Services Diane Boudreau-Tschetter
Jim Saxton SF Liquor Licenses
Orville Wright Central Valley Business Broker
Jim Thomas Broker Consultant Fitness
Facebook
Twitter
Linkedin
Vlogs and Podcasts
BizBen Blogs And Articles
Advertise On BizBen
New Postings Reports On BizBen Sign Up
BizBen ProBuy Program
BizBen ProSell Program

BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved



Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Top 100 List: This Week's Top Motivated Business Buyers & Their Requests...
Read More News
Business Purchase Financing - 3 Things You Need To Know Now For Success
Read More News