Situation: A company has several locations for its operations. One is onsite at one of their principal customers where they perform services for the customer. The rest of the business is pursuing a different direction, so the CEO wants to sell the onsite business and focus all efforts on the main business. How do you sell an onsite business?

Advice from the CEOs:

• Do onsite business (OS) personnel identify themselves as part of the company or the customer’s company?
  • The older personnel themselves as part of the parent company; the new engineers see themselves as tied to the customer which is far larger and enjoys broad and positive brand recognition.
• Now may be the time to sell from a price perspective. Companies are hungry for revenue sources and experienced personnel. The price that they would pay for the OS business is small change for them.
• The decision comes down to price – can the company get the right price at the right terms?
• Consider this alternative – break the OS off into an independent entity. Make it a separate company with own managers.
  • This allows the sale of the OS to be set up with its own operating rules and incentives, independent of the company’s other operations.
  • This move queues the company up for whatever is possible – ongoing operation or possible sale to a buyer. It also simplifies the sale scenario as OS would be a stand-alone unit, with its own personnel and management structure. There may be some shared infrastructure services with the company’s other locations, but these are services that would be taken on by the buyer using their own systems.
  • An option is to give stock to the managers of the OS – a piece of the pie to encourage them to stay on.
• Given the company’s strategy and direction, investing additional funds in the OS doesn’t make sense. Selling and keeping the money makes more sense if the company is ready for this and feels that there is little or only a limited future for the OS business.

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