The biggest challenges faced by most EO sales are:
- Business generating adequate cash flow to pay for financing the EO sale
- Business having the ability to continue to run and perform even after the owner sells.
Some of the bigger challenges commonly associated with employee ownership sales include:
- Creating a clear plan for leadership succession after owner sells.
- Building conviction among employees to remain committed to it after the owner sells.
- Ensuring the business is in strong financial position after the owner sells.
- Structuring the sale such that the valuation, cash paid to owner at-closing, and financing costs are fiscally viable for the cash flow generated by the business.