The Disorientation of Selling Your Business

There is a world of difference between being a successful employee of a large corporation and the successful owner of a business that was started from scratch. If you are one of the latter, you know just how much work you had to put into it, with all those sleepless nights, the long days of work trying to get those first clients interested in your products or services and the uncertainty of the first years of business. These are things that all entrepreneurs remember as they gain more success.

Inevitably, there comes a time when they need to find someone who will take over the business. In many cases, their children aren’t interested in the business or aren’t capable of running the business, so their only option is to sell their companies. Some of them decide to maintain an ownership or leadership role -- remaining as Chair of the board, or Chief Operations Officer, but at some point, they recognize that the key to financing the rest of their lives lies in selling the business and collecting enough profit to live the rest of their lives without worry.

This whole decision making process can be a very disorienting experience for owners because their business basically became part of their essence, their identity. At some point it ceased just being a way to make a living. Everything that they have achieved, the things they own and the experiences they’ve had are all linked to this company they built from the ground up. When they decide to sell it, it is like going through a grieving process that is similar to the loss of a loved one. The only difference is that they are relieved of all the hard work and the feeling of always having some responsibility.

Your Business Continuity

           In an ideal world, your business will continue to flourish long after you have exited.  In reality, not everything works out accordingly. Having a solid plan for your business’s continuity after you are gone is very important. Multiple circumstances can arise that, without a sufficient plan, can leave your employees flailing.

            Exit planning from both the owner and those next in line are of the utmost importance because the lack of experience and understanding of how to handle the business should the owner suddenly die or become disabled can be detrimental to the owner’s family, and can possibly bankrupt the business. A buy-sell agreement is essential to the continuity of a business, but it is only one part of exit planning.

            Common mistakes often include, but are not limited to: failing to deal with a financial continuity plan when a co-owner dies, failing to deal with the management or leadership of the business when the “leader” of the business dies, and failing to deal with financial, leadership, or business continuity when the sole owner of the business dies. Morbid as it may sound, we never know when an emergency will be thrown our way. Ideally, a business owner, especially a sole business owner, will have a prewritten continuity plan long before anything should happen. But life is uncertain, and being prepared for the unknown in the business world could make or break what is left of all of your hard work.

            It is an excellent idea to be well prepared if such an occasion should arrive. Planning is meant to be something done before an exit, either an intentional or unintentional exit. Start planning now to avoid having you or your family watch your business suffer.

5 Ways to Prepare Your Leaders for Success

There is no doubt that applied knowledge and targeted experience is one of the keys to success. When employees gain the knowledge and experience they need for higher level roles before they get into the position, they are better positioned to lead into the future. Giving employees early leadership experiences and opportunities ensures the sustainability and future success of your business.

How can you prepare your leaders for more responsibility?

1.      Let them learn on the job. This means allowing them to make mistakes, recover and learn from them. It means expecting them to address issues directly and come up with creative, effective solutions. This helps them learn to think like an executive.

2.      Give them “fix-it” or “turnaround” jobs. A stretch assignment will force them to problem solve, communicate across organizational boundaries, overcome obstacles and build effective relationships. They will learn to become more persuasive, tough, and influential.

3.      Have them build something from scratch – start up a new project, build a new team. This will teach them resourcefulness, initiative, and tap into their creativity. If it’s a part of their current role, they will have to learn how to prioritize what is most important.

4.      Encourage ‘a day in the life’ where you have your leaders switch positions with a colleague in a very different role. Encourage them to go deeper in the organization to see firsthand the challenges your team faces with ineffective systems, poor handoffs, difficult people, dysfunctional communications, etc.. This exercise will expose them to your business in a very different way.

5.      Expose them to the financials so they understand how you make money, what are your most profitable products, who are your most profitable customers, where do you have losses. Help them understand the impact of decisions on the bottom line.

Giving employees and potential successors these kinds of experiences long before they need to step into an ownership or management position is an invaluable way to groom a successor. Giving up control can be difficult, but their transition to effective leadership will be much smoother with these kinds of experiences