Your business = Your identity

As a small business owner, your whole identity can be wrapped up with your business. If you step away, you could lose that identity. You could lose a reason to stay involved with a merchants group, or you may no longer be invited to participate in certain business networks. Without your business identify, you have to redefine or reinvent yourself.

In any business exit or succession—whether it involves transitioning out of business ownership or just management control—a gradual process is ideal.  We encourage business owners to:

Assess your current business first

Before rushing into a change, you need to understand the value of your business and the strength of your systems. Are you building or have you built business assets that have real value? Do you have operational systems that can be understood by others? Do you have key employees that will stay and take on increased responsibilities?

Share your knowledge

Employees or junior partners will need to be prepared to become majority owners. Family members need to know what they are getting into. You may need to hire new senior management who must get up to speed. Any new manager (or eventual owner) needs to get to know the business inside and out and develop the skills needed for success.

If the transition is gradual, a new manager/owner will have time to grow into his/her role, gain confidence and also credibility in day-to-day management. As time goes on, you can take on more of an advisory (or backseat) role… and by then you will be ready to be in that new role.

Get support

It can feel impossible to focus on a future transition when there is so much to attend to with the business right now. You are managing products or services, employees, cash flow, marketing and day-to-day operations. How do you focus on your transition goals when so many other aspects of the business need your attention right now?

An advisor, support partner or support group can help you stay accountable to your transition planning. We work with small business owners who want to step away from a full-time management role but are struggle to figure out how to do it.

We help clients:

• Put the right management systems in place to step away
• Hire or promote the right management staff
• Work with family members to build skills and create a succession plan
• Gain confidence in the new management team
• Create financial projections for the transition
• Clarify their new role apart from the business

As small business owners, we pour our hearts (as well as lots of time and often lots of money) into our businesses to make them succeed. After that huge investment, we want to be remembered for our excellent products and valuable services. We want to see our businesses continue to flourish even after we step away from full-time management or are completely out of the picture. Creating a plan for how to transition will help make it happen, and can help make our desires a reality. Start now!

The post Stepping away – a management transition appeared first on Paul Terry & Associates.

Don’t wait. Think about a business exit now.

No matter how successful you are in business and how much you love our work, you should think about what will happen to your business when you no longer actively manage or run it.  At some point down the road—a couple of years or decades from now—you will leave your businesses (or your businesses will leave you). Personal circumstances might change or burn-out could happen. You may be ready to pursue a new endeavor or want to retire. Or someone could approach you about buying your business.

Business exit options

You may not be able to predict your business’ success, your future interests, or the direction of the marketplace. But you can start thinking about the business exit options that could be a good fit for you.

There are a variety of ways to exit your business. You could pass it to a family member, partner, employee or other business stakeholder. You could sell it to an outsider. You could liquidate it and sell the assets, or you could file for bankruptcy.

How will you figure out what is best for you and your business?

Envisioning the future

We encourage you to think about the future of your business and what it might look like when you are not at the helm.

• Is your goal to create a legacy business that will last forever?
• Do you ultimately want to pass the business on to a family member?
• When you are ready to stop running the business, do you hope to sell it?
• Would you want the business taken over by an employee(s), partner or other internal stakeholder or would you want to sell to an outside party?

The vision for your business will change as your business develops and circumstances change, but thinking about your business’ trajectory, including your exit, is a key part of strategic planning and business growth. (If you are in a business partnership, it is important that you have an ownership agreement, from the beginning, that spells out what will happen if one or more partners wants to exit the business.)

Planning your transition

When you are ready to think seriously about transitioning away from your business, you need a business exit plan. Just as a good business plan is an important part of business start-up, a good exit plan is key to a smooth transition away from the business.

We help our clients through the transition planning process. This includes identifying or clarifying your motivations and goals, assessing the current strengths and weaknesses of the business, and creating a role transition or business sale timeline with clear benchmarks. We then help business owners stay accountable to their plan.

Our goal is to help small business owners feel ready for their next steps, with a feasible and straightforward plan to guide them through their transition.  Learn more about our ownership transition consulting services.

The post Business Exit… have you thought about it? appeared first on Paul Terry & Associates.

But if you have employees, how do you motivate them to feel as passionately about the business as you do? How can you encourage them to “act like owners”, too?

Eight Tips on Motivating Your Team:

1. Create a culture of trust. People want to work hard for people they respect and trust. If they feel confident in their relationship with you (and with other employees) it will free them to focus on the work, instead of worrying about inter-personal work-place dynamics.
2. Share praise. When your employees are doing a great job, let them know. And let others know, too! It can be highly motivating to have one’s work acknowledged and appreciated publicly. Also, giving employees opportunities to take on more responsibility can be a great form of recognition, too.
3. Be more transparent. Openness is essential for any small business. Your employees need to know what is going on in the business so that they have the information they need to do their jobs well. They should also be getting regular feedback on how they are doing their job. It is particularly important to be transparent if there is going to be a change in the business that will affect your employees. People need to know how the change will affect them personally. Once that is understood, they may be much more likely to work with you through the challenge or transition.
4. Share decision-making. It is both respectful and practical to involve your employees in key decisions, especially decisions that directly impact their jobs. Often it is the people closest to the problem that have the best insight into possible solutions.
5. Give people space. It is important to let people accomplish tasks and make decisions independently within their area of the business. No one likes to be micro-managed. Focus on results instead of how the work gets done. (Your way may not be the only way… or the best way.)
6. Take time to talk and to listen. People feel more confident and energized to do their work when they fully understand what is expected of them, and know that you are available if a problem arises. If you give someone authority over a task, take time for training, communicate the constraints and boundaries of his or her responsibility, and the process for asking questions and getting assistance.
7. Take the long view — delegate. In the moment when something needs doing, it might seem easier (and faster) to just do it yourself. It can take a lot of up-front effort to explain the task and then that person might work slowly or make mistakes. But giving employees opportunities to take on new and challenging tasks will help them reach their full potential and will ultimately create a much stronger team for your business.
8. Keep things interesting! No one wants to do the same thing over and over. Every job has repetitive tasks but a part of everyone’s job should involve something interesting. Think about how employees’ tasks align with their experience, knowledge and skill-level, as well as their long-term goals and interests.

If you have employees, they are an essential part of your business – you cannot be a success without them. By creating a more transparent enterprise, sharing praise and decision making, and taking the time to listen and to delegate, you will create a positive business culture that will help both you and your business thrive. When you encourage employees to develop skills and stay engaged with the business, you will be making the best use of your time and skill level, too!

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Becoming the leader of a business can be a similar process.  We step into the role (sometimes before we are ready) and we step up to the opportunity (even if we stumble along the way).  Finally, we learn to step out of day-to-day management and into a leadership role.  We develop the personal perspective and skills to take our businesses to the next level.

TIMING IS EVERYTHING
Your business will have different needs at different times.  As a new start-up or a home-based business, you need to figure out what you are doing, convince others to buy from you, and close the sale.  As you expand, you can go after more clients and customers and adjust your services and products to fit the market.  As your businesses matures, you as the owner need to mature as well.  You need to know when it is time to step away from the day-to-day running of the business and bring in additional support.  This becomes a leadership opportunity.

LETTING GO
Giving up control over certain aspects of your business is one of the hardest things to do as a business owner.  Yet it is essential if you want to grow your business.  To be successful, your time needs to be spent on the future of your business, not just the day-to-day needs.

GETTING READY
But how do you recognize the gaps that you need to fill?  How to define the complexity of your business and bring your business skills into alignment?  How do you know you are ready to hire people and train them to operate the business the way that you have proven is successful?

As a small businesses owner, you may be forced to make quick decisions, reacting to opportunities as they appear instead of strategically setting your course.  And, you may have to make things up as you go along, essentially “building the plane as you fly it”.  Yet when it comes to hiring people, good preparation is key.  It is critical to to first ask yourself why you need help, what type of person or skill set is best suited for the job, and how you will train, direct and assess new hires so that you can incorporate them smoothly into your business.

JUMPING IN
Here are six important tips to consider when planning to hire employees and step into a position of leadership.

1.  Understand the financial impact
Before jumping into a hiring process, you need to be able to afford it.  Financial costs and revenues forecasting comes first.  Hiring the right person comes second.

2.  Look for people who complement your skill sets
It is important to hire people who can do the type of work that is important to the business but that you don’t do well.  Do you struggle to track your expenditures or manage your budget?  Bring in someone with strong money management skills.  Do you love making the product but shy away from reaching out to potential customers?  Hire someone with great people skills and a sales or marketing background.

3.  Spend time on training and then get out of the way
You might be eager to get a new person working as soon as possible but it’s important to put energy into training so the new hire not only understands how to do things the right way but also understands why it’s important to do them that way.  Once a new person is trained, it’s time to get out of the way.  The business is your “baby” and you may have been responsible for all tasks until now.  But the only way a new hire can be motivated, loyal to the business and successful, is if you let him or her own some of the work, too.

4.  Set the right tone and others will follow
You, as the owner, set the business culture.  If you are motivated and happy in your role, if you are transparent, open, consistent and fair, then others will follow your lead.  As the owner, you must be a good communicator and in particular, you must communicate your vision and goals with the people who work for you.  Without clear business goals, it’s easy for everyone to get lost in the details and lose sight of the big picture.  You all need to be on the same page.

5.  Continually take the pulse of your team
A good leader takes time to give clear directions, solicit feedback and listen to suggestions.  By scheduling regular check-ins, team meetings and performance reviews with your employees, you create a productive space for communicating goals, addressing concerns and answering questions.  Your employees can then feel confident that they know what is expected of them, and you can feel free to give them the space they need to do their jobs well.  How you communicate with your employees (and how your employees communicate with each other) makes all the difference!

6.  Get help through the process
You don’t have to figure it all out on your own.  We help small business clients all the time to assess their needs, make the right hires, create training programs to build strong teams, and implement better management systems.  Your support network of advisers and other small business owners can be a guide or sounding board as you develop leadership skills and systems for better management.

It is important to invest time, money and attention in your people.  They are key to your business success!

The post Step in, step up, step out: learning to lead appeared first on Paul Terry & Associates.