MBO stands for Management Buyout and it is one way to transition your business. In an MBO, you sell your company to your management team instead of looking outside the firm for a buyer. There are some risks involved in this transition just like any form of transition, but many times the benefits offset the risks.
First of all, the buyer was already found! You don’t have to invest any valuable resources in finding the right buyer. Second, you don’t have to explain the whole business or give lots of tours to potential buyers, because your management team already has all the information they need. They have been living and breathing this business just as you have.
Then what about talent retention? Well, your managers will definitely not leave the ship now that they are the owners. The employees under their management will have less upheaval as well.
But, most important of all: Isn’t awesome to transition while you reward the ones that helped your business to succeed?
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