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There are two ways to sell your business to your employees:

1. Transition to a worker cooperative
2. Set up an Employee Stock Ownership Plan (ESOP)

Learn about the difference in this video. 

Because of the significant cost involved, Employee Stock Ownership Plans are most appropriate for companies with profits over about $1M or so. That eliminates a lot of small businesses.

There are still costs associated with converting to a worker cooperative, but you have more control over them. That makes it an appropriate option for the thousands of small businesses owners getting ready to retire in the next ten years or so.

Selling your business is a multi-year project if you care anything about the outcome.

1. Get yourself ready:

Whether you sell to your employees or to a third-party, there are four fundamental questions you need to answer to prepare for the sale.

1. Decide when you want to exit
2. Who will take over?
3. How are you going to live?
4. What are you going to do?

2. Get your business ready:

Again, either way, you need to know if your business is even salable.

1. Can it run without you?
2. Are your personal and business financials separate?
3. Is it growing or stagnating?
4. Does it rely on a single or a few customers, employees or vendors?
5. What sets it apart from every other business?

3. Finally, get your buyers ready

If you sell to a third-party you need to figure out who would be interested in buying your business. You do not need to tell them how. That is their problem. You just need to make your business as attractive for them as you can.

When you sell to your employees, it is a little different. Chances are they may never have thought this would even be possible. If they do not dismiss the idea out of hand, they will have a lot of questions. They will want to know every detail of how it is going to work. You will have to have answers for them and you are no doubt going to need help with that. Help is available and it costs less than you think. See our pricing here.

Exit Strategy: A practical guide to selling your business - How to sell a company for the best price and ride into the sunset

Hiring professionals is almost always better. However, when professionals get involved, they tend to take over and you loose control. It is a tremendous help to have at least a basic understanding of what they are doing. That puts you in the driver's seat. You can control what is going to happen.