Many entrepreneurs hope to build a business that has value. According to the popular business book, “The E-Myth Revisited,” author Michael Gerber goes on to say that if building value and creating an exit strategy isn’t a part of your business plan, you need to fix that or make sure that you really should own a business.
My personal experience has shown that many business owners wait far too long to address how to gracefully exit their business. It’s hard work to create value and have a business so good that someone else would want to buy it. Of course, your hard work and dedication must come first, but beyond that there are some steps to consider if you haven’t already.
Build a great staff. When you’re gone – voluntarily or not – the business will still have customers. A great staff, even if it’s only one person, can make the difference between your customers getting what they want or scrambling to replace you. A buyer generally is not willing to pay for a maybe and hope that the business sticks around. Furthermore, if your demise is sudden or unexpected, time is working against your heirs or employees without a good plan.
Find someone who can be ‘in charge’ tomorrow if needed. If that person doesn’t exist in your current business structure, consider talking to colleagues with a similar business and see if it would be feasible for you to cover each other if needed.
If there is such talent in house, you must decide who your ‘go-to’ employees are and have a conversation. You want to address their role in any business interruption caused by your inability to work. Let them know that you value them enough to be having this conversation and a possible new role will involve increased compensation.
You don’t want to have a mad scramble for the door by clients or employees the minute that you can’t perform.
You should also talk to your clients. Just because it is a topic that may not has not come up in your ordinary conversation with customers – it’s likely to be on the minds of many. You’ll be surprised to see the positive reaction that you get from clients when you let them know that you’ve considered how to provide them a high level of continued service in your possible absence. This also makes it easier later in life when you may sell your business or retire.
Time is not on your side. You may not plan on stopping work for another decade or more, but that doesn’t mean that something can’t hit the fan tomorrow to end that for you. Most business succession or exit planning specialists would suggest a minimum of three to five years of exit planning before your desired departure date.