Small Business Resilience

Resilience is the ability to adjust, to flex, to recover. To encounter a barrier and find a way around it or through it. For me, the approach to a challenge starts with a “beginner’s mind”. This approach can help us see a new possibility or a lesson learned.

I have been continually inspired by the resilient small businesses in our community who have faced countless barriers throughout this pandemic. Though many small businesses have been forced to close, many have found ways to pivot, survive and even thrive. They adjusted, learned and have stayed in business!

Read on to learn about some of the amazing small business owners in our community who are surviving and thriving.

Please support them this holiday season and beyond!

Melissa Myers
The Good Hop
Years in business: 7.5

Melissa started working as a brewer in 1996 and from the moment she brewed her first barrel she was hooked. In 2013 she opened The Good Hop, a craft beer bar and bottle shop in Oakland that specializes in independent breweries with a focus on California. Brewing beer, selling beer and talking about beer is Melissa’s passion!

What happened to your business when the pandemic hit? We closed per state mandate. It took me 4 days to create an online store and turn my in-person beer bar into an online beer bottle/can shop. I had to let all of my employees go (some had been with me for 5 years) and my regulars struggled for a place to go to process what had happened to their world. Normally bar folks would go to their local bar to find support about what is happening to them and the world around them. It felt like the bottom dropped out and we were basically forced to build a whole new business.

How are you and your business doing now? We are still recovering. It has been a long 20 months. All data from the day before, the same day the week before, the same month the year before, the holiday last year; all that data can’t be used for present day. Supply chains both for finding employees and receiving products are constantly shifting. BUT we are still open! So that should say it all. We did everything we could to keep and build a community online that usually happens organically and in person. Community, both patrons and local breweries, have come out to support us and in turn we have become much stronger in our community, for our patrons and with the small businesses of Oakland and the craft beer industry.

Any specific products/services to promote? Holiday Beer Boxes! We offer 5 different options and each box is specifically curated by me for a fantastic 12 beer experience. Each can is individually wrapped and no beer is ever repeated from the years before. The Holiday Beer Boxes are gift wrapped and ready to be given to someone special or it’s a great gift to oneself to enjoy this holiday season. Follow this link to see all 5 Holiday Beer Box options. Or visit in person! 2421 Telegraph Ave, Oakland.

Gillian Shaw
Black Jet Baking Company
Years in business: 11

Gillian founded Black Jet Baking Co. in 2010 as a wholesale operation, delivering cookies and Pops (handmade Pop Tarts) to coffee shops and offices all around the city of San Francisco. In 2017 she opened a retail location in Bernal Heights where you can find a wide variety of delicious baked goods.

What happened to your business when the pandemic hit? Before the pandemic hit, our business was 50/50 wholesale/retail. When the pandemic hit, we completely lost 80% of our wholesale business.

How are you and your business doing now? We are hanging in there! The retail side of our business is growing as we added different products post pandemic that have proved to be very popular. We have added more staff and are currently in the swing of making tons of holiday pies!

Any specific products to promote? We just got some great merchandise in stock for the holidays – tees and sweatshirts! And always pies and cakes! Visit us at 833 Cortland Street, SF.

Carol Gancia
Ripplemakers
Kokak Chocolates
Years in business: 17

Carol is a force of nature! She operates two small businesses to fulfill her passion for helping people tell their stories (a video production company) and making delicious, beautiful products (a new chocolate shop). Her newest enterprise, Kokak Chocolates, is an Asian, LBGTQ, woman-owned business that takes pride in using fair trade heirloom chocolate and producing all of their chocolates in micro-batches in an open kitchen at the shop. Carol’s chocolates are made from a rare cacao variety called Nacional and feature unique, tropical flavors.

What happened to your business when the pandemic hit? Client purchase orders for my video production company were cancelled for three months and we could not bill any projects. We were also on the verge of opening our first retail store for our chocolate shop which had been in construction for almost a year. We opened in June 2020 with hardly a soul in sight on the streets. It was tough but it pushed us to promote online and introduce shipping within three months after we opened. It helped drive customers and we actually had a great holiday season.

How are you and your business doing now? My video production company is doing very well and has a steady stream of projects. My chocolate shop is growing its customer base each year.

Any specific products/services to promote? Kokak Chocolates aims to be a unique gift for friends and families. We also offer customization options for gift wrapping and also do custom truffle designs to make the most impactful gifts for corporate gifting and events. Visit our shop in the Castro (3901 – 18th Street, SF) or go online to order.

Megan Johnson
The Animal House
Years in business: 14.5 years

The Animal House is a pet shop on Fillmore Street in the Lower Haight neighborhood in San Francisco that offers a wide variety of products. Megan believes in treating pets like family members and has gone all out to merchandise her small retail location with everything you need, and she can offer help in every aspect of pet ownership.

What happened to your business when the pandemic hit? We were designated an essential business, which was very scary in itself. It forced me to get my online shop up and running for curbside pickup. We reduced hours and kept at-risk employees out of the shop. People reacted to the stay-at-home orders by getting pets, which was great for my business.

How are you and your business doing now? It is actually doing better now than before Covid!

Any specific products/services to promote?It’s a great time for pet sweaters and coats! We have plenty of options to keep your pet warm and dry. Come on by! 157 Fillmore Street, SF.

Atava Garcia Swiecicki
Ancestral Apothecary
Ancestral Apothecary School
Years in business: 25+

Atava is an experienced herbalist and teacher who founded a school dedicated to the study of herbal, folk and indigenous medicine. The school is committed to being a learning community centered on people of color for the study of herbal medicine and honoring the diverse cultural healing traditions of the Bay Area.

What happened to your business when the pandemic hit? At first we lost a lot of students who didn’t want to make the transition to Zoom classes. However, over time our numbers of students increased because we were now able to attract students from around the country and the world. Plus, in a virtual space we could increase the class size, which had been limited by the size of our classroom. As a clinical herbalist, I was able to transition all of my clients to an online platform.

How are you and your business doing now? Ancestral Apothecary School grew and expanded during the pandemic. The growth of the school has been both wonderful and overwhelming. Due to many changes in my own life, including a move to New Mexico, I am in the process of selling the school. I have a wonderful buyer who has been integral in the school community, who I trust to continue the legacy of the school. Starting in 2022 I will focus my work on seeing private clients as an herbalist, teaching, and selling my herbal product line.

Any specific products/services to promote? If you mention this newsletter, you will receive 20% off any of my healing services!

Lauren West
Next Highest Good
Years in business: 5

Next Highest Good is a professional organizing company specializing in zero waste and serving the San Francisco Bay Area and beyond with in-person and virtual organizing, moving and relocating services.

What happened to your business when the pandemic hit? We did some virtual organizing during the shelter in place order. In June, 2020 we were able to get back into people’s homes (masked, of course). We hit the ground running and haven’t stopped!

How are you and your business doing now? We are busier than ever! I am not sure if it is people working from home, word of mouth from 5 years in business, or our unique zero waste approach but we are fielding more inquiries and booking more jobs than ever before.

Any specific services to promote? We specialize in zero waste, which is finding a home for all the things our clients no longer want or need. We take loads of care to re-home, donate, upcycle, recycle, compost ++ and avoid landfill at all costs. (Mold is the only deal breaker!) You would be surprised at what we have been able to re-home for our clients. One person’s trash is another’s treasure could not be more alive for us.

Learn more about Lauren and her business in this recent interview.

A Successful Family Business Ownership Transition

Every small family business faces unique challenges and unusual choices unlike other small businesses. This is particularly true when the founder(s) or current business owner(s) decides to explore if they can transition away from a management role, reduce their ownership share, leave the business (and/or perhaps consider even consider selling it to a non-family member). However, in order for a smooth transition of management oversight and/or business ownership from one family member to another, there are some important considerations that everyone needs to face.

Is the current owner willing to give up “control” of the business?
Will this existing owner be open to the business changing under new management?
Is the potential new business owner(s) sensitive to the founder’s needs related to control and change?
Will the new family member(s) taking over the business be as passionate about the business?
Will the new owners have the commitment and competency to manage this type of business?
Can the business “pay” any price/value of the business requested by the departing founding owner?
Is there a transition plan that both the out-going and in-coming owners can create together?

These are several considerations that all need to be addressed and solved. No small feat!!

Transition is a process

First, it is essential to understand that effective ownership succession is a process. It takes time to ask all the key questions, gather all the critical metrics and develop a plan – and for everyone to feel comfortable phasing in or out of the business. Unless there is a reason why a transition must happen in a hurry, it is preferable that the current owner take time to slowly phase out of their role, and the new owner(s) slowly phase in. The most successful ownership successions happen over years not months.

Communicating about the business to all generations

If you plan to pass your business on to the next generation, consider engaging them in the business in positive ways – from an early age. It can start just by talking about the business in ways that will give them an appreciation for the work that is done and the impact that it has in the community. There may be times when they will see you and your business struggle. So be sure they also see what you love about this business and why they might, too. When they are ready and able to work in the business, can you frame it as an opportunity instead of a requirement or a burden? (Just because someone is your close relative, does not mean they want the business as much as you do.) Ideally this starts with a relationship built on trust. You can both be honest about what you want for yourself and for the business.

Setting up the next generation for success

How do you reach a point where the next generation is passionate about the family business and you feel comfortable putting them in charge? Each family business is unique and there are many paths to answering this question. Here are some ways to get there:

Give the next generation important opportunities to work in the business. Ideally years before an actual succession takes place, the next generation should be getting experience in the business, perhaps even working different jobs and in different departments. You want your family members to develop their skills. You want them to get hands-on experience as well as learn about the culture of the business and start understanding the business inside and out.

Encourage the next generation to follow their outside interests. You want the next generation to want to be a part of the family business. Though it might seem counterintuitive, there can be a lot of value to the family business in having the next generation explore their passions and get work experience elsewhere. They will gain skills and build their confidence and get the chance to create their own identity as a working person in another business environment. If and when they decide to return to the family business, they will bring those skills and that confidence with them, and the family business will be all the better for it.

Key tasks and delegation. Each family member wants to find their own place in the operational structure of the business. This will help everyone understand how they fit into the business and to each other. This is especially important in a family business with both family and non-family employees. Existing employees also want to understand how the incoming family member fits into a particular role in the business. Will a new family member have goals; will they too have to listen to and take directions and also need to create metrics to measure progress.

Key roles and responsibilities are also important for you as the current/departing owner. The exercise of writing down your responsibilities can be a great way to take stock of all the things you do. What are the responsibilities and critical skills necessary to run the business? What parts of your job play to your strengths? What is most challenging? Writing out this “job description” can help clarify the job/roles for the family member joining the business, including what aspects of your current role you want to pass on first.

Give the next generation specific areas of responsibility. Are there specific aspects of the business where the eventual new owner of the business can sink their teeth into and make their own? By taking responsibility for one aspect of the business, they will get to develop their skills and implement their ideas within certain parameters, and you get to practice giving up control. New members can take on new areas of growth; can become the head of technology or could apply their skills in financials analysis and/or making meetings work.

Share the challenges. It is important that you don’t shield the next generation from discussions about the challenging aspects of the business – when there is a loss of client; a production error or employees who must be re-trained. This will give a more complete understanding of the business. You would hope that they may bring some fresh ideas or new perspectives. Invite them to share their ideas on ways to help the business in the short-term and over the long-term. Apply their solutions and see if it can be implemented and measured.

A changing business – timing is everything

The next generation may want to make changes to the business that will affect the way business is done or how technology is used. They may want to add new services or products to match a changing target market. You as the departing owner may see the value in certain changes and at the same time, it can be difficult to watch the business going in a different direction. This is a common tension for family businesses. The timing of how to “control” different aspects of the business get shifted, needs to feel comfortable for both the outgoing and incoming owner. If changes feel too fast, you, as the departing owner, may resist implementation and/or sabotage the change. If change feels too slow, the incoming owner may decide that this is not the right fit for them as nothing will ever change!

Letting go – moving on

This may be the hardest step you as an existing owner will ever have to take. It is understandable that after pouring your time, energy, sweat and heart into your business for years it can be very difficult to let go and let others take charge. The business has most likely been central to your identity for decades. The owner of this business is who you are in the business, within the community and within the industry in which you travel. This “letting go” will be a very, difficult process. It will require honest discussion with you and all others. Then, there may need to be a written agreement on the stages of a transition and a timeline for getting there. Yet, once these decisions have been made, you will be able to create a framework for a successful transition.

Creating a succession plan – a peaceful transition

You and your family don’t have to stumble through succession planning alone. It should be a team effort with support from an accountant, an attorney, and a business advisor and/or mentors. They can help you set a reasonable timeline, guide you through the process, help you create a framework for the transition and understand how this leadership change will impact your business. Learning about other family business’ experiences with succession planning can be invaluable as well. Become a member of the Gellert Center to connect with other family businesses and get access to additional resources to help you on your succession journey!

The changing of the guard can be peaceful and very empowering for all concerned. This is always an essential step for the long-term success of any business. Drop the reins and let other family members take up the slack. With a careful and in-depth plan, you will all be ready. You will have people who are qualified to take over; they will bring energy, passion, and new, exciting ideas; the business will continue and grow. In the end, you will not regret it. You not only started and have grown a successful business but determined how it will continue well into the future.

Good work, boss!

Learn more about how Paul Terry & Associates helps small businesses with ownership exit/succession planning.

This post was originally published on the USF Gellert Family Business Center website.

A new beginning

At the start of a new year, many of us want to make a change. Can we change a bad habit into a good habit? Can we make our diet more healthy? Can we start that exercise program we let slip? Can we start meditating or journal writing regularly?

At the start of a new year, we make resolutions. We will volunteer with a local non-profit. We will be active in a political campaign to get our favorite people elected to office. We will engage with our neighbors and become more a part of our community. We want to change our habits and improve our relationships and have a larger impact on the world around us. There is so much to do!

In business, the beginning of the year is a great time for long-term planning – which essentially means planning for growth or positive change. Our planning process may entail making or modifying a to-do list with key tasks and timelines or creating financial projections. For most of us who run very small businesses, the best thing we can do is sit down (either alone or with a trusted support person) and decide on one specific goal or outcome that we would like to reach by year end. We can then make monthly commitments to get there. We will then be just 12 steps away from a completely different place!

That is the crux of taking action. Create attainable goals, outline the steps that are needed to get there (with realistic deadlines), and hold yourself accountable to the plan.

This planning process is essential when you want to make a big management transition, such as adjusting the ownership structure of your business, adding partners/investors or improving management systems. Whatever the transition, it definitely needs to include creating a realistic plan to reach your goal.

As we move into the year, let’s resolve to make a plan and let’s be sure to hold onto the beginner’s mind. That’s the mind full of possibilities. Setting a goal and a particular path does not mean you have to close yourself off to other directions. Keep your eyes open, connect with others, test your assumptions, learn and be influenced. Here’s to a year of change!

“In the beginner’s mind there are many possibilities…”
– Zen teacher Shunryu Suzuki,

Grappling with change

The only thing constant is change. As a small business owner, you know this well. Navigating the ups and downs of sales and marketing trends, hiring employees or letting them go, adjusting your business expertise to match the marketplace. Change is inevitable.

Predictable change

There are some changes you can anticipate, control and prepare for. You may know your product sales will jump during the holidays. You can predict a seasonal spike in sales and be ready with more inventory, increased employee hours, etc.

You can also be the driver of change. You can take a new direction with your business, plan for business growth, or decide it is time for ownership succession or a business sale. You can map out a specific management timeline and take a series of steps over weeks (or even years) to manage the change.

Unexpected change

Then there are the changes that happen suddenly and are completely out of your control. With the coronavirus pandemic and its related public health orders and business closures, you (like many others) may be scrambling to address the impacts on your business while also dealing with the effects to your personal life. You may be feeling out of control and anxious and perhaps at a loss for what to do next.

Here are some simple yet effective strategies that may help during this unprecedented time.

Acknowledge your fears. Think about your fears and write them down. Some of your fears may lose their power once you face them straight on. Recognizing them could lead to ideas for how to deal with them.
Seek support. Reach out to others — friends, colleagues, advisors — who can remind you that you are not alone. They can be there for you with support, empathy and accountability. They may be able to give you a different perspective to help illuminate a path forward.
Be here now. Mindfulness meditation (even for just a few minutes a day) and other awareness practices can help you relax and stay calm. Meditation can help you focus on the present moment and make mental and emotional space for new insights and perspecive.
Remember the past. You have never experienced something like the coronavirus pandemic before. But the way you dealt with past challenges may help you get through this one. What helped in past difficult situations? Did you get support from friends, spend time on self care, actively tackle the problem a little bit at a time each day? Tap into an old practice that worked.
Keep moving. Sometimes the easiest first step is just to put one foot in front of the other. Focus on what you love. Focus on concrete tasks. What you accomplish each day, even if small, will help you deal with the challenge at hand.

Above all, remember to be patient with yourself. Give yourself the permission to wait for solutions to come. You will get through this. We will get through this together.

Teaching Entrepreneurship

I have taught classes for many years, starting as an ESL teacher in Europe and Canada while in my early twenties. I learned valuable and practical lessons from teaching ESL—that we learn through hands-on, practical experience, and that it is easier to do something new and potentially scary when we feel supported and we’re having fun!

To teach English to new immigrants I used the art of play, street theater and shared humor to help students deal with a new environment, develop trust and face their fears related to learning a language. Together we learned about culture and language out loud and in full view of each other, developing a place of trust. Students were then encouraged to take their new knowledge and courageously put it into practice on the way home.

Established and emerging entrepreneurs also deal with an unknown environment and many fears. They are often wedged between the fantasy of what they hope will happen with their enterprises and the reality of money, management and marketing. This can be exciting and scary.

When teaching business owners, it is helpful to use a hands-on approach and involve the whole class or cohort in the process. Humor is key, as well as helping to foster excitement about learning together. Teaching entrepreneurship is not just about lecturing (although content and theory is important), it is a doing process. Students need to take what they learned in class and apply it.

Business workshops or classes can introduce business skills, demonstrate social media and traditional marketing techniques, and present real world financial projections. However, it is also important for students to get out into the real world themselves. They need to test their assumptions. Then they can use the classroom for sharing, reporting back, and group problem-solving sessions with actual business models. The class becomes an important learning community and support system.

When I teach small business classes, students research how their business idea fits in the marketplace with face-to-face interviews, they expose their ideas to the reality of the numbers by doing rigorous financial analysis, and then they develop a practical, realistic plan of action that they can test week by week. This plan must be adjusted as the marketplace and then their own level of confidence and excitement reveal the right directions, with the class support there to help.

The focus must be on empowerment and building confidence as well as teaching entrepreneurial skills. Small business owners need to tap into their passion and also have the ability to mitigate risks. It is important for business owners to continually cultivate the right balance of business skills and intuition.

By guiding students through an engaging curriculum, giving them access to resources and mentors, and providing direction related to good management practices, we can help entrepreneurs launch and sustain a successful venture. The process is fun and richly rewarding for both student and teacher, because in the best learning environment, the teacher is learning from the students, too.

Selling Your Business – Essential First Steps

Are you thinking about selling your business? We assist small business owners with management transitions. For clients interested in selling their businesses, we help them focus on these essential first steps:

1. Understand your business exit motivations

Why do you want to sell your business? Perhaps you want to start a new business or focus on other pursuits. Maybe you are burned out, at odds with your business partner, or ready to retire. It is important to understand what is motivating your decision to sell your business. Your current perspective and emotional outlook can affect your approach to the sale and the timing of your business exit.

2. Prioritize your sales goals

It is good to start a business sale process with a clear idea of your desired outcomes. Are you looking to sell immediately? Is a high sale price the most important factor for you? Do you want to remain involved in some capacity? Do you have preferences for who buys the business? Do you want to influence how the business operates after you sell? Is a cash sale necessary or will you consider seller financing? Clarifying what you want will affect the sales approach you take.

3. Assess your business’ current condition

Is your business a good sales prospect? Is your business likely to attract a buyer? Are there areas of the business that will need improvement before you sell? When looking at each aspect of your business, you must try to understand the business from a potential buyer’s perspective. You need to consider your sales and profit history, the business’ financial condition and your products or services. For a brick and mortar business, look at your business location, your facilities and your equipment. To be a good sales prospect, your business may need to retain your employees and your clientele…and perhaps even you for three to six months!

4. Assess the current value of your business

How much is your business worth? Valuing your business helps you set an asking price. There are different ways to determine the value of a small business. You will need to consider your tangible and intangible assets and the business’ prospects for growth. You can hire a business valuation expert to do a business appraisal or work with a business broker to request a Broker’s Opinion of Value. With recent tax returns and financial projections in hand, it may be sufficient to work with us to do some simple calculations to estimate a realistic amount.

Now you are ready

Once you are clear on your motivations, your goals, and the current condition of your business, you are ready for one of these next steps:

• Prepare to present a sale-ready business to interested buyers.

• Invest the time to make your business more attractive to buyers and increase its value. (This would start with an action plan and timeline for each area of the business that needs improvement.)

• Offer to sell the business at its current sub-par condition (knowing you may have lower interest and/or a lower sale price).

• Continue to operate the business as well as you can and close it when you are “done”, selling any tangible assets.

We can help! We work with clients through these initial business transition steps. We review the current business so you can consider a business sale. We help with business improvement action plans to improve the value of your assets (even if you do not sell right away). We help you compile the documentation necessary for a business sale. Learn more.

Do you have a personal support system?

Being a small business owner can be isolating. By creating your own personal support system, you can combat that feeling, get guidance with business next steps and find the motivation to take action.

Here are four personal support strategies that are simple to set-up, easy to maintain, have a built-in accountability factor and are proven to work!

1. Support Partner

The support partner is your unconditional “business friend”. Ideally, this person is someone in business like you who can listen, give emotional support for your business issues, and provide constructive feedback on business dilemmas and opportunities. The relationship is bi-directional – each support partner helps the other. You each take turns listening and giving/getting advice. You may agree to meet weekly, catch-up, share problems and successes, and then use your partner as an objective reviewer for your weekly plans. During this pandemic, you can meet in person outside appropriately distanced, or by phone or video chat. The meeting should be a check-in for ongoing support and follow-up. It is important that this relationship is on-going (at least bi-weekly) and long-term (at least 6 months). That way, your support partner gets exposed to your business issues and understands the context and the players in your world. Your meetings can be a catalyst for positive change and an opportunity to talk discreetly about business issues outside of your own business environment.

2. Peer Support Group

This strategy involves gathering several “business friends” into a support group of peers – people in business at similar stages of growth and open to getting and giving help to colleagues. They could be in the same industry but they don’t have to be. This group could meet monthly on Zoom to share concerns and common goals and to provide one another with useful information. Like the support partner strategy, each member of the support group gets encouragement but to an even greater extent, since the support is coming from a group of three to six people. You can prepare for a meeting ahead of time and focus on a work-related goal. At the meeting you can get creative brainstorming support from a small group of people all focused on you. You will provide the same support and business feedback for them – each person taking 15-30 minutes of group time to discuss the issues, present some options, take feedback and promise to implement a solution. Before the next meeting, you will complete your tasks, as there are other people waiting for your results! This accountability factor is very helpful. Your support group will be expecting to hear about your progress at the next meeting and your success related to implementing next steps.

3. Business Mentor

We all know people who know more about being in business than we do. These are people that we approach as our advisors or “business mentors”. This person could be a small business owner or business professional like a banker or an accountant, a larger (and friendly) competitor, or simply a friend wise to the ways of business. The relationship is usually very professional, managed carefully, and used only when appropriate. Once a mentor has been located and established (even if informally), you must respect the advisor’s time (which, after all, they are giving you for free). Show that you value their time and professional advice by staying within the meeting timeframe agreed upon, communicating your appreciation for their support, and following up by email to share your progress and the results of their advice.

4. Team of Advisors

This group is a voluntary board or team of advisors that may only meet annually. This is a broad-based group of people who volunteer to meet together for you, follow your agenda, review your issues, and give their individual and collective advice. This group may include a senior manager in your industry, a successful entrepreneur, your friendly attorney or accountant, or even an established competitor in your field – who wants to give back and help you!

You need to find and invite the right mix of experts and set up the meeting. You will want to prepare an agenda beforehand. The idea is that there is time for you to talk about your business and key issues/challenges and then have time for them to share their advice. You will have a group of incredible experts focused specifically on you and your success for 1 to 2 hours. Their compensation is that you will take in their advice, implement it and follow-up about the results. They will delight in your progress and success. In addition, they may get to develop a new network of peer supporters for their own businesses.

Each of these four business support strategies are valuable. Depending on your needs, you can use just one or all four to support yourself and your business. Start by picking the one that most appeals to you, seems the simplest to get going, and has the most potential to bring you tangible results. By committing to this process, you are committing to make your business work. Asking for and getting help from others will help you succeed!

The Exit Planning Audit: Are you ready to go?

At some point, most small business owners will ask: What is next for me beyond this business?

“I want to pursue something new.” “I’m burned out.” “I wonder if I could sell this business.” “My family member or employee wants to take over, and maybe it’s time.” “Retirement sounds good!”

If you are having a similar thought, it may be a good time for a business audit. A business audit is essentially a business check-up — you are assessing the health of your business so you can make well-informed decisions about next steps. A business audit is a great management tool to use at any stage of business… ideally annually!

An exit planning business audit is a tool to help you specifically evaluate your readiness for an ownership transfer and determine if your business is a good sales prospect. Will your business be attractive to a buyer or will it need improvement prior to offering it for sale? Is the business’ goodwill of high enough value to attract interested buyers, or are you better off selling physical/tangible assets and simply closing the business?

Here are some initial business audit questions to consider when exploring a business ownership transition:

Your business exit motivations:

Why do you want to exit your business?
What do you want to do next?
Do you want to leave completely or stay involved in some way?
Do you have any conditions for a business sale?
Do you have a vision for your business even after you aren’t involved?

The status of the business:

Do you have up-to-date financial statements that match your tax returns?
Have sales revenues and profits consistently increased over the past few years?
Does your business have a distinct competitive advantage?
Does your business operate with clear written procedures and agreements?
Can your business operate without you, or with you in a different role?
Does your business have opportunities for growth?

Your answers to these questions (and many more!) will help you determine the right next steps for you and your business, and the best timeline for an ownership transition.

A business exit can be complicated and we encourage you to start thinking about your business exit well in advance. You want time to consider what an exit would mean for you and your business well before you are ready to make this change. You want a transition that won’t negatively affect your employees and the vendors, clients or customers reliant on your business.

Don’t wait until your business is struggling or you are desperate for a change before you act. With thorough exit planning, you can improve your readiness to transition and the value of your business!

At Paul Terry & Associates we help small business owners answer the many questions related to ownership transition. We take clients through an exit planning audit — prioritizing business ownership transition motivations, evaluating the business’ strengths and weaknesses, and assessing the readiness for a business sale. Then we help business owners create a plan for a successful transition.

Learn more here!

A Successful Management Transition

Are you thinking about transitioning out of a leadership role in your business? Stepping away from your small business does not have to mean giving it up completely. It could mean removing yourself from day-to-day operations or delegating management responsibilities to someone else so the business can continue to function smoothly without your constant presence.

In any business transition—whether it involves a change of business ownership or just a change in management, we encourage business owners to consider these steps:

1. Assess your current business

Before making any big management change, understand the value of your business and the strength of your existing systems. Be sure to ask key questions and audit your business.

Have you built business assets (both tangible and intangible) that have value?
Do you know what your business is worth?
Do you have operational systems that can be understood by others in your business?
Do you have key employees that could take on increased responsibilities?

2. Address training and control

To step away from the business, your employees need to be prepared to take on more responsibility. You have to be ready to give up some control. If senior members are taking the reins, they need to know the details of the business and understand what will be expected of them. You may need to hire new senior management who must get up to speed and gain your trust (and your employees’ trust). Any new manager (or eventual owner) needs to understand the business inside and out and develop the skills needed for success. Your role will be to facilitate all of this.

3. Take your time

In any big business transition – whether a change in business ownership or a change in management – a thoughtful, step-by-step process is ideal, if possible. A gradual transition allows for a new manager/owner to grow into their role. It can take time to gain confidence and also credibility with all stakeholders. As time goes on, you will be able to assume a more advisory (or backseat) role. By then you will be ready for it. If selling your business is the goal, you will need time to prepare for the sale and find the right buyer. So… look at a realistic timeline and set the right pace for you.

4. Get help

It can feel impossible to focus on a future transition while attending to the day-to-day demands of the business. You are managing services, employees, cash flow, marketing and day-to-day operations. How can you focus on your transition goals when so many other aspects of the business need your attention right now? An advisor, support partner or support group can help you create a transition plan. They can also help you stay accountable to the plan within a realistic timeline. Other professionals such as an accountant or bookkeeper can help you understand the financial health of your business and the ramifications of any change. At some point, you will need legal help, too. Get the professional help you need to hold yourself accountable and make the right decisions.

5. Your identity as a business owner

As a small business owner, your whole identity may be wrapped up with your business. You may think you want a change but you may feel reticent about losing control of the business and the change of personal identity the comes with stepping away. Perhaps you would no longer have a reason to stay involved with a merchants group, or you may no longer be invited to participate in certain business networks. Without your business identity, you may need to redefine or reinvent yourself. This is an important step to take!

As a small business owner, you pour your heart, lots of time and often lots of money into your business to make it succeed. After this investment, you want to get the compensation you have earned and see your business continue to flourish after you step away. Creating a solid transition plan with a realistic timeline and a good support team can help make this goal a reality.

Paul Terry & Associates help small business owners with transition planning, which could mean bringing in a partner, stepping back from a full-time management role and/or preparing for a business sale. For clients preparing or a management transition, we help you:

Work through the challenges related to change and new roles
Install effective management metrics and timelines for the transition
Hire or train committed management staff
Create financial projections and estimate value for any transition
Produce and implement an exit/succession plan

Learn more about our ownership transition services.

It takes a beginner’s mind

“In the beginner’s mind there are many possibilities, but in the expert’s there are few.”

In Japan the phrase shoshin means “beginner’s mind”. According to Buddhist monk and teacher Suzuki Roshi, this is the goal of Zen meditation practice—to have a beginner’s mind, a mind open to everything and ready for anything.

In his book, Zen Mind, Beginner’s Mind, he writes, “In the beginner’s mind there is no thought…of achievement, no thought of self, we are true beginners. Then we can really learn something. The beginner’s mind is the mind of compassion. When our mind is compassionate, it is boundless.”

Keeping a beginner’s mind is at the heart of a successful entrepreneurial venture. For the emerging business owner, everything is in a beginning stage. Everything may seem new and groundbreaking. Yet to develop a unique business model and a specific selling proposition, we need to be creative, respond to a changing marketplace and deal with continual competition. We have to constantly stay open to what we can learn and then put into practice in our business.

For the established business owner, we are now successful to a certain degree and yet always trying to re-invent ourselves and our approach to business. We may have new products, design new services or attract more clients. Perhaps we are attempting to have more sustainable practices or adjusting our management style to be more transparent. Staying open and keeping that “beginner’s mind” can lead to “ah ha” moments, whatever our level of expertise or experience. Through the beginner’s perspective we stay flexible and compassionate—both with ourselves and the stakeholders all around us.

Being a successful small business owner is a blessing. We have a chance to run our business just how we want to do it… not how someone else is telling us to do it. We have a principle, a perspective and a generosity that we want to express. We may be established business owners but we are also beginners. Every day we look at how to adjust to changes and make a statement that will make a difference and have an impact. As a small business owner, we can begin – again and again… and bring the world with us – one business transaction at a time.