Why it’s important to invest in your employees

Whether you’ve run your propane business for five years or it’s been in your family for 50 years, you should be thinking about your eventual transition.

When you give it serious thought, make sure you consider your employees, because having a strong team will increase your company’s value.

In fact, when it comes time for your transition, having the right team members in place – along with thorough HR documentation – can make a big difference in what you will net from the sale of your business.

Employees are the key to your success

The No. 1 determinant of long-term success in business is people. In your propane company, that means everyone on your team plays a role in the valuation of your business.

When a potential buyer considers your business, in addition to inspecting all your “hard” assets like tanks, trucks and equipment, they will take a very close look at your employees, benefits and HR documentation. Do you have solid, long-term employees who are ready to assume managerial roles under new ownership?

Key employees play a pivotal role in maintaining continuity and stability within your business. Their absence or departure during a sale can disrupt the workflow, create uncertainty among the remaining employees and even lead to a loss of customers.

Retaining these key employees is essential to minimize disruption and maintain stability, enabling the business to continue functioning optimally during the transition. Further, they may be a selling point for someone wishing to acquire or merge your business with them.

A prospective buyer will quickly assess the type of customer service your team is known for, whether that’s through online reviews, your social media presence or the look and feel of your website. Establishing a reputation for treating customers and employees with respect and making them feel valued is crucial to your company’s long-term success.

Start building the right team now

To build the right team, start with your hiring process. Recruiting the right new team members is critical.

Just like Major League Baseball recruits the best players, you should recruit the best possible people for your team. Use your current workforce for referrals; rewarding employees for recommendations cultivates a culture of collaboration and teamwork.

Thoroughly document your hiring process, compensation and incentive programs. Begin documenting any “side deals” or arrangements you have with employees. Understanding the complete employee is important to your potential buyers, both financially and strategically.

Invest in training and development

Once you have good, loyal people in place, help them develop their careers. There are several propane industry training modules available through PERC and NPGA. Make sure you document all the training in which each staffer participates. A potential buyer will go through your personnel files to ensure your team members have the industry training required to serve your customers safely while helping your company succeed.

Don’t overlook the importance of performance reviews

Do you have annual performance reviews? If not, start now. Not only are candid and productive performance reviews important for your employees, but when that potential buyer reviews your personnel records, he or she will want to know that your employees have consistently received the feedback and coaching required to become valuable, contributing members of the team.

Consider a buyer who values people

For many propane marketers, long-serving employees are like family. When contemplating a transition, prioritize finding a buyer who values your team. Will they retain existing team members post-transaction, offering competitive compensation and advancement opportunities? Select a buyer who not only respects your team but also values the culture you’ve created, ensuring its continuity for years to come.

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Kathy Johnson is executive vice president and chief human resource officer for EDP. She leads an HR team that serves the company’s 700-plus employees. With more than 20 years of HR experience, Johnson has an undergraduate degree from DePaul University and a Master’s of Jurisprudence in Employment and Labor Law from Tulane University. She can be reached at kjohnson@edplp.net or 312-254-5977.