Which teacher agreements should I tidy before selling my music school?
Gather every agreement with every teacher, written or not, and make them match how people are actually paid and scheduled. Pay particular attention to how the working relationship is described, notice terms, who owns lesson material, and who the students belong to if a teacher leaves.
Begin with a simple list: each teacher, their start date, how they are paid, the days they teach and the paper that covers them. A buyer will find gaps within minutes, so find them first. Where a handshake deal is in place, write it down and have the teacher sign.
The status of each teacher is a point to check. Whether someone is an employee or a contractor depends on how the work is really done, not just the label. Ask your lawyer to review it, and your accountant to look at how pay was recorded.
Next, look at what happens when a teacher leaves. Is there a notice term, a promise not to take students away, and a clear rule on lesson plans and recital material? Make sure the terms are fair and clear, because an overreaching term may not hold. Lastly, check whether the agreements can pass to a buyer, and whether teachers must agree. Plan how and when you will talk to staff about the sale. Do this early, because a teacher who is asked to sign a new paper right before a sale may start to wonder why.
Key takeaways
- List each teacher with pay, schedule and the paper that covers them, then fill the gaps.
- Ask your lawyer to review how each teaching relationship is classified.
- Clarify notice, student ownership and lesson material before the buyer asks.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentMajor pitfalls to avoid when negotiating a purchase agreement
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaIndustryHow to sell your business
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