HTSS159 - What to expect when private equity buys your employer in sales (Part 1) - Scott Sylvan Bell

Private equity and your sales role changes 

Private equity is buying small, medium, and large businesses.  These roll-ups are being fueled for revenue and future values of the companies. The company you work for could be in the hands of an owner you know one day and then its sold the next.  You have an owner you know one day and then you are owned by a faceless group the next. The first thing they say is “nothing will change”. You need to know this isnt true. 

What to expect from new company owners with private equity 

When a company is bought you will have major changes coming your way. You can expect these changes to happen quickly. Here are a few things to expect:

• Prices will be increased / maybe multiple times
• It will mostly be about the money from here on out
• Rules will change / all of them
• Investment in your 401 / retirement will change
• They may want you to train / they want your skills to be duplicated across their company
• Teams will be combined

Management changes in sales when private equity buys your employer 

When the company you work for is bought by private equity management will change. You must know there will be problems behind the scenes. The new managers need to show their power and the old managers will have to fight for positions. You will be left holding the bag and answering to new people. 

• There will be power struggles with the new and old management team
• Management will be brought in to not have to live up to old agreements and ideas
• You may have issues with managers trying to hold onto their positions first, dealing with your concerns 10^th

The previous owners you answered to no longer can help you 

You may feel helpless when the "old owners" cant do a thing to help you. The problems you used to be able to address cant be fixed. You will get empty promises, at the end of the day the old owners are there for the transition only. 

• The old owners may be around but have no ability to make choices and decisions
• The owners will have to stick around for 12 months – 18 months / they have no skin in what happens
• You will get told to "hold on" things will get better 

The new owners and private equity 

When the new owners and managers step in preparation for rainbows and sandcastle stories. Everything will be shown as magnificent.  The new owners want to size up the team to see who should stay and who should go. 

• There will be promises made, hey may or may not be real
• They will sell you on the new ideas and the future 

The new new owners under private equity 

The valuation of the company will change and will attract new buyers. It's not uncommon for companies to be bought and sold a few times in a year to get to the next valuation.  

• The company will be sold again and packaged with another company

You have decisions when the company you work for is bought by private equity 

If you are in sales you should always prepare for a departure from the company you work for. It doesn't matter if it's a better opportunity or for you to be fired.

• Make your water mark for what you will put up with a private equity purchase
• Look for connections now so you are not stuck when the company you work for is bought out by private equity
• You may want to be the first one off the team looking for a better position