I'm in the final stretch of selling my 15-person landscaping business. Buyer wants me to stick around for 6 months to help with transition. I told him I'd do it, but now I'm wondering if I should charge for that time. My wife says yes, my accountant says yes, but my gut says just help the guy out since he's paying a fair price. What's the norm here? Am I a sucker if I don't charge?
Exit Planning
Should you get paid for post-sale consulting?
Charge. Always charge. If you give it away for free, they value it at zero.
We didn't charge for transition help when we sold our bakery. It was 3 months of hand-holding and it felt like the right thing to do. But our buyer was a young couple, first-time owners. They had already stretched to afford the place. We just didn't have the heart to bill them for showing them where the fuse box was, literally and figuratively. No regrets.
"Is it customary?" Yes. Every deal I've been around had a consulting agreement, usually 3-12 months, and it was paid. Usually something like 5-10% of the deal value spread over the consulting period. Or an hourly rate. But But free? That's not commmon. Free is you being nice, not you doing the normal thing.
You're not a sucker for wanting to help. You're just leaving money on the table, and your wife is right. Listen to your wife.
The buyer is paying a fair price. A fair price assumes you disappear at closing. The transition help is extra. Extra work = extra pay. Simple as that.
I do think there's a difference buetween being available for questions and doing actual work. If you're just picking up the phone when they call, that's one thing. If you're showing up at 6am to do estimates with their new crew, that's a job.
Also worth asking: what does the purchase agreement say? A lot of these deaals have a transition period baked in for 30-90 days. If you already agreed to 6 months in the LOI without discussing comp, that horse may have left the barn.
Ha, yeah yeah. "I'll stick around" and then asking for money later is a great way to start a business relationship with a dispute.
Weird thread. Half of you sound like you'd charge your own mother for a ride to the airport. OP, you don't have to charge if you don't want to. But get the terms in writing either way. Scope, hours, how to end it early. Free doesn't mean vague.
Eh, my mother is a lovely woman who would never ask for for six months of unpaid labor.