When most of us think about selling a SaaS business, we think that our relationship with our product will be over. That can be great for some people! Maybe you are ready to move onto the next thing. Many people design a product with the goal of selling one day. This is totally valid and can be a great way to build wealth, especially for people who want to build a product and want to try something totally new without running the previous business. However, there are a number of options for what your relationship will be with the new company after they take over.
This is great for people who still have a passion for the product but do not want to be the sole person in charge of running the business.
Another huge benefit to you staying on the team is that you probably have a relationship with the customers that use your product. They may know who you are and associate you with the value they receive from the product. By staying on the team, the new owner of the business does not have to lose trust with customers because they do not know him or her.
Here are 3 options for what the future relationship could look like if you still want to be involved.
1. Retained Position:
In 2016, according to Business Insider
, the UFC sold for over $4 Billion Dollars. That alone is crazy… but that is beside the point. After the sale, Dana White still held a key role in the company. He is currently the president. Like a lot of people who build businesses and products, their relationship to the company is key to the success of the company.It is not just the name recognition that can add value to the company.
It is also the fact that creators know what it took to make the products successful and scale a business.
You know your SaaS product better than anyone and you can add massive value to the new people who run it.
You may not have an ownership stake anymore, but you could receive a salary and still get to see the success of the product you designed. Very few of us ever reach that level of business with our products. However, you have built something that people value and that is important to each person that uses the SaaS product.
2. Work With The Company As A Consultant:
This option gives you and the new owner a lot of flexibility. You would not be required to show up daily for 40 hours a week. They would not have to figure out how to pay a full salary. Instead, this would give them an opportunity to work with you on certain projects or issues that come up.
This can be a great option for you as well. It frees you up to work on other projects and pursue other opportunities, all while still bringing in a stream of income.
3. Remain Part Owner:
Another option is to only sell part of your business. This option allows you to still profit from a partial sale while retaining some ownership and influence.
One of the biggest benefits to this is that it can allow you to redefine your role and let you focus on what you are most passionate about. Say you do not like the daily operations of the business and focusing on all of the administrative details and tasks. You may excel at the marketing side of the business and have already built a relationship with your customers. This would allow you to find someone who is specifically skilled at operations and focus on what you do best. There are all kinds of options here but by sharing some of the responsibilities, it can allow you and your new partner to help the business grow even faster.
One of the biggest challenges to this is the potential for conflict. Whether it is with friends, family, or a relationship, none of us like conflict. It can turn a business relationship into a difficult situation without productivity. While bringing in someone to help work alongside and doing it as a team can be exciting, it can also bring plenty of challenges.
The key here is setting up clear roles and expectations from the beginning. It may even be worth putting in the contract how difficult decisions are going to be made, who has the final say on certain decisions, profit sharing, who does staff report to if there are any, and how salaries and hours are decided. Setting clear expectations from the beginning can save a lot of conflict later on.