uilding a business is like raising a child. It’s exciting, terrifying, rewarding, and frustrating all at the same time. Your business is a reflection of you; no one cares about it more than you do, and your DNA is in your business—it’s a part of you. You’ve nurtured it, grown it, and weathered countless storms together.
However, at some point you know there will be a new season for you and your company as you pass the baton to someone else. That moment should be a culmination of a process, requiring much intentionality and planning. The months and years leading up to it will determine if that day is terrifying or exciting.
Unfortunately, too many business owners don’t do the succession planning and proactive work ahead of that transition and essentially end up giving the company away, or at least selling it for cents on the dollar—or worse, they may have to mothball the business altogether, letting it slowly erode.
Overcoming these issues requires time, so if you are selling your business on Tuesday, this may not be the article you need. But if you do have some runway ahead of you, let’s get to work!
When I sit down with business owners, very few have a date-specific goal for when they would realistically like to sell. They also may be unaware of the price they’ll need to fetch to close the gap between wealth from other investments and the overall financial position necessary to live comfortably for the rest of their lives. The selling price isn’t the only objective, but it’s a good starting point—it’s measurable and tangible.
Secondly, how much of your time is spent on doing what only you can do? To clarify, I am not asking about what you do better than others in your company, but doing what ONLY you can do. You might have a key employee who’s only 80 percent as effective in a role as you are, but if that is more than sufficient for them to be successful in those duties, should you still be hanging on to that role?
Many entrepreneurs and business owners are CEOs: Chief Everything Officers. They wear too many hats and have their hands in every facet of the business. How much is your time worth? $100 an hour? Maybe $500? Are you still doing tasks you could hire out for $75 an hour and getting frustrated because the work keeps piling up?
I challenge you to go beyond outsourcing and delegating and start thinking about making yourself unnecessary in the daily operations of your business—or at least redundant. Becoming unnecessary, at least for ground-level, day-to-day activities, should be a green flag when it comes to how you measure long-term success.
Will you find someone who is exactly like you to buy your business? Almost certainly not. But can you mentor someone now to gradually step into your role? They might not yet have all the skills and expertise, but you can start molding that person into an operator who can effectively run your company in your absence. That employee doesn’t have to be interested in being the successor of the business, but having that key operator means that whoever does purchase the business has an existing leader in place, making your company more turnkey and far more valuable.
You probably don’t plan to sell your company for far less than what it’s worth, but do you have a plan not to?
Let’s bring it back to parenting: no one knows the perfect decisions necessary to raise a child in the best way. But there are always simple, concrete choices at hand if we want to be intentional parents. It’s often not so important what you do first but that you do something. Make the important urgent—take action on your company’s succession strategy.