Get Out Your Golden Handcuffs: A Way To Retain Your Key Employees

Whether you are planning to sell your company to an outside owner (third party sale) or a family member or key employee (relationship sale), your key managers and employees are essential to the future success of your business.

But what exactly does this mean?

It means you must assess and identify which of your key employees are essential? Who do you need to lead and run the business? Then it is time to look at how to keep these key employees involved in the business after you are gone.

The most common way to do this is to offer some sort of incentive to the key employees who are essential to running the business, especially if some of these employees could be potential owners one day. Keeping them invested in the business as if it were their own, builds commitment while building capability to run your business profitably and sustainably.

Talk to your financial advisor to learn about the use of benefit packages that favor your key employees. These plans are designed to keep key employees on board, giving them the opportunity to act like owners without having to share the equity of your entire company.

The main benefit of these benefit plans is that you can design it however you feel is best for both your company and your exit. This means that:

• You can choose the employees you wish to keep on board.
• You can design the plan so employees who leave the company will no longer receive the benefits once they exit.
• You can make it so the financial incentive they receive goes towards them becoming an owner of the business.

The key is to provide sufficient incentive to keep them from running to another career opportunity. There are some very creative ways of doing this, and it’s worth investigating. Your key employees are the people who will keep the business profitable and keep the value high, whether a third party owns your business, or your employees buy you out. Keeping them happy and committed to your business is important.

Stop Making Excuses – Start Planning!

Most business owners make excuses as to why they won’t leave their business. But making excuses only leads to procrastination and the unpreparedness that may lead you to squander a great deal, or not be able to leave when you wish. You have nurtured and grown your business, maybe from nothing. It has been one of the most important things in your life, and deciding when to leave it behind is equally as important.

Some common excuses from business owners and ways to combat them include:

• Darn! My business isn’t worth enough to meet my needs. This excuse is legitimate, but also can be addressed. Making an exit plan to drive up value years before you intend to leave will help ensure that when the time comes, your business will leave you financially stable. Start now to identify the most productive and tax-efficient ways to leave on your own terms.
• This business is my life! Who will I be without it? It can be scary to leave behind something you’ve poured your heart and soul into for the last thirty years, but if you invest some energy in assessing what motivates you, you can find a meaningful and rewarding lifestyle in your post-business life.
• A buyer will find me when the time is right. If only… This passivity can lead to working much longer than expected, much longer than wanted, or it can result in a bad deal for you. Being an active seller is better than waiting; the market of tomorrow may not be perfect, you never know when a competitor can move in or another recession hits. Working towards finding a suitable buyer is always better than waiting for one to come to you.
• I will be required to work for a new owner for years. Not if you make sure you have a solid team to run the business while you’re still there. Invest in their professional development. The less you need to be involved now, the less you’ll need to be involved then. Your business is more valuable if you don’t need to run it day in and day out.

Start planning for this transition now to secure your financial security and future happiness and to ensure the sustainability of your business for your employees and customers. There may not be a perfect time to exit, but the time to start planning is now. When you actually walk away is an incredibly personal decision that only you can make.

Appraise the Value of Your Compliments

“The most exhausting thing in life is being insincere.”  -Anne Morrow Lindbergh I couldn’t agree more.

Now, that doesn’t mean I am advocating that we all take a page out of Scrooge’s handbook and bring “Bah-humbug” back onto the scene...

Why flood your market with ‘atta boys’ and ‘good job’ compliments?

It’s not that they are not sincere. I am sure you mean that ‘good job’, but what does ‘good job’ really mean? To preserve the value of your compliments, it all comes down to whether or not they are specific enough that the receiver really understands what you are complimenting --  and whether people can really trust that what you are saying is true and free of a personal agenda.

Sincere and specific compliments are hard work. Most people won’t bother. Finding the right words to describe specifically what you appreciate or value in someone else’s actions is not easy. It requires paying enough attention to note the behaviors and then finding the words to describe them with the sincerity you feel.

Every time you give someone the gift of your words, remember, the quality of the gift you give is a direct reflection of the quality of character you have.

Let’s stop accepting or giving gold plated placations …

and instead strive to give the kind of compliments that are so specific and tangible that they are remembered forever.

Who will you give a sincere and specific compliment to today?