Sometimes “getting out” of a business doesn’t mean giving it up completely. It may just mean letting go of a certain amount of control. Stepping away from day-to-day operations. Delegating management responsibilities to someone else so the business can continue to function smoothly. For this type of transition to be successful, the business owner needs to be ready to give up control.
Your business = Your identity
As a small business owner, your whole identity can be wrapped up with your business. If you step away, you could lose that identity. You could lose 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 identify, you have to redefine or reinvent yourself.
In any business exit or succession—whether it involves transitioning out of business ownership or just management control—a gradual process is ideal. We encourage business owners to:
Assess your current business first
Before rushing into a change, you need to understand the value of your business and the strength of your systems. Are you building or have you built business assets that have real value? Do you have operational systems that can be understood by others? Do you have key employees that will stay and take on increased responsibilities?
Share your knowledge
Employees or junior partners will need to be prepared to become majority owners. Family members need to know what they are getting into. You may need to hire new senior management who must get up to speed. Any new manager (or eventual owner) needs to get to know the business inside and out and develop the skills needed for success.
If the transition is gradual, a new manager/owner will have time to grow into his/her role, gain confidence and also credibility in day-to-day management. As time goes on, you can take on more of an advisory (or backseat) role… and by then you will be ready to be in that new role.
It can feel impossible to focus on a future transition when there is so much to attend to with the business right now. You are managing products or services, employees, cash flow, marketing and day-to-day operations. How do 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 stay accountable to your transition planning. We work with small business owners who want to step away from a full-time management role but are struggle to figure out how to do it.
We help clients:
- Put the right management systems in place to step away
- Hire or promote the right management staff
- Work with family members to build skills and create a succession plan
- Gain confidence in the new management team
- Create financial projections for the transition
- Clarify their new role apart from the business
As small business owners, we pour our hearts (as well as lots of time and often lots of money) into our businesses to make them succeed. After that huge investment, we want to be remembered for our excellent products and valuable services. We want to see our businesses continue to flourish even after we step away from full-time management or are completely out of the picture. Creating a plan for how to transition will help make it happen, and can help make our desires a reality. Start now!