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!

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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.

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