There’s a saying amongst business consultants that some business owners aren’t looking for a successor, they’re looking for a monument conserver!
Understandably, leaving behind the business you’ve built up through your hard work is an emotional one. You need to remember however that you’re selling the company, not yourself. When owners are having difficulty letting go, they can send conflicting signals that compromise credibility and create confusion and doubt in the minds of potential buyers.
As the current owner, ensuring your house is in order and that you, your advisers and your team are pulling in the same direction and presenting the business well, is critical.
The first step is changing the way you see yourself – no longer as an operational owner but as a managing director of a strong management team. In many companies the owner wears many hats from General Manager to CFO to Sales Manager. Although this is often for good reasons, it is a big hurdle to overcome in succession planning. The value of a business is enhanced if the owner is not required to run the business. To get your business ‘sale ready’ you need to hand over any unique knowledge, such as customer contacts, special production or product knowledge, to the team that will remain when you leave. Without this, the business is worth far less.
Often it goes ‘against the grain’ to hand over control. But when you are planning to exit your business, you need to find ways to delegate responsibility to streamline the management of the business so that you as the owner are not tied to running every major aspect of the business. For now, you might control of some critical tasks, such as hiring of new staff, sales reviews and cash flow checks, and keep sensitive information such as company profit and employee salaries to yourself. But having a strong management team in place for all day-to-day activities is much better place for a successful succession plan. After all, you will need your employees’ help to prepare the business for the transition and then to make that transition successful. And while you negotiate the sale, you need to know that the on-going management of the company is running smoothly so that no surprises crop up at a critical point in the sales process.
While there is no one-size-fits-all approach to managing the challenge of simultaneously overseeing a successful business and managing a sales process, careful preparation and ensuring you have a strong management team is vital. Employees feel empowered and informed, you are freer to focus on succession planning and the sales process, and the new owner gains a thriving business. In that scenario, everybody wins!