Are you thinking about transitioning out of a leadership role in your business? Stepping away does not have to mean giving it up completely. It could mean removing yourself from day-to-day operations or delegating management responsibilities 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
If you the owner plan to step away from the business, your employees need to be prepared to take on more responsibility and you must give up some control. If senior staff are taking the reins, they need to know the business and understand what will be expected. You may need to hire new senior management who must get up to speed and gain your trust (and your employees’ trust). Any 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. You will be able to assume a more advisory role. By then you will be ready. If selling your business is the goal, you will need time to prepare 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 other aspects of the business need your attention now? An advisor, support partner or support group can help you create a transition plan and stay accountable within a realistic timeline. Your accountant or bookkeeper can help you understand the financial ramifications of any change. At some point, you will also have legal issues. Get the professional help you need to make the right decisions.
5. Your identity as a business owner
Your whole identity may be wrapped up with your business. You may think you want a change yet feel reticent about losing control of the business and or the change of personal identity with your business. Perhaps you want to stay involved with a merchants group, or may no longer be invited to certain business networks. Without your business identity, you may need to redefine or reinvent yourself. As a small business owner, you pour your heart, time and money to make your business succeed. If leaving, 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.
