Every business owner will exit their business in one way or another. It can happen on their timeline, or it can be forced by circumstances – but it will happen. The question is whether they will be driving the process, or if circumstances (and other people) will be doing the driving. How “last, and greatest, test of entrepreneurship” is handled will go a long way to defining the future of the business, and the legacy of the owner. It will impact family and personal relationships, the next stage of their life, and the amount of money they put in their pocket.
I don’t believe I’ve ever met a business owner that doesn’t understand their business at a very deep level - at least in terms of the product or service they offer their customers. In other words, they know how to work in or at their business. What is sometimes lacking is the knowledge, skills— and sometimes merely the time—to work on their business. This can include not developing the processes and procedures necessary to maximize the growth potential of the business. Or not engaging in the strategic planning necessary for maximum operational efficiency.
You can request a free copy of "Business Succession Planning: An Owner's Manual" by contacting the OEOC at email@example.com.
Ultimately, the deficit is often felt hardest when it’s time to figure out how to develop a successful exit plan.
With all the demands on a business owner’s time and attention, finding the bandwidth to devote to an important (and complex) activity like succession planning can be hard to do. We've found that breaking down the process into smaller steps can make things easier and increase the likelihood of success. Here is the way we like to "stage" the process:
1. Defining your goals and objectives, for your business, and yourself (and family)
2. Determining how much your company is worth
3. Exploring available options for selling or transferring your business
4. Developing and implementing your succession plan
5. Developing a personal plan for the next stage of your life
Working through these steps will not necessarily be easy, or quick, and each of them will have their own set of additional steps. This is one of the reasons why we recommend that, regardless of whether you are 30 or 60 years old, there is no better time than now to start thinking about what your exit plan might look like. Think of this analogy – the time to start saving for retirement is not when you turn 60, or even 50. The earlier you start, the greater flexibility you will have as your retirement gets closer. The same holds true with business transition planning.
Things will change in the time between starting and finishing your exit plan. It is very probable that your goals and objectives will be different at 60 than at 30. Even so, every bit of advance planning now will go far when you feel ready to exit the business. It is often said that if you wait to start planning until you do feel ready, you’ve waited too long. I’ve seen the truth of that statement play out many times.
If you are a business owner, and would like to talk about these issues in further detail, feel free to reach out. As a non-profit resource at Kent State University, we are here to help, and would happy to go grab a cup of coffee (I’ll probably order tea) and talk. We can help you work through some of these issues, get you in touch with specialists and professionals that can assist with the technical stuff, and much more.
In addition, on Tuesday August 9, from 7:30 AM – 9:00 AM EDT we are partnering with the Portage Development Board on a Business Roundtable session titled, “Who’s Going to Own Your Business Next?”. You can learn more and register at this link: https://roundtable-oeoc.eventbrite.com.