Many years ago, a produce company sold its assets to an investor.
The former owner, who had invested several decades in the business, left, thinking that the company he started, nurtured, and grew, was in good hands. Little did he know that circumstances would lead to a disastrous conclusion only months down the road.
The owner sold not only his building, equipment, accounts receivables, and inventory, but his former business name.
The company’s name was synonymous with excellence: it had earned a rating of XXXX and was recognized as a Trading Member. The new owner convinced the former owner to let his business name come with the sale. (It should be noted that the Blue Book rating or Trading Membership designation was not part of the sale).
Bad decision as it turned out.
The new owner was ill-equipped to run the business and, as a result, ran the business into the ground, leaving hundreds of thousands of dollars unpaid to vendors. The business name and reputation of the original business leader were trashed.
An unlikely occurrence for sure, but as the business saying goes: things happen.
If you are contemplating selling your business, give thought to whether you should allow a future owner to use the name under which you operated. It was your name. It stood for something you liked and believed in.
Will the new owners feel similarly, or will they view the use of your name as a sure-fire pathway to initial success, to be followed by only who knows what?