- Position the Business for Continued Success and Growth
In passing down the business, you will likely have a vested interest in the business remaining prosperous – for Chris’ success and continued livelihood (and maybe other extended family members); continued healthy growth of your retirement fund; the employees, customers & suppliers that rely on you; and lastly, your legacy.
Engage the skills, talent and abilities of your management team and all employees to position your business for ANOTHER decade of success and growth. Changeover at the helm is an excellent time and excuse to strengthen culture, business approaches and expectations while resetting and re-energizing the organization.
Having built and successfully run the business, you know its likely opportunities as well as the potential pitfalls. You also know a few things that could be cleaned up or improved before Chris takes over – the obsolete inventory, the extended accounts receivable, preemptive negotiation or renewal of a few strategic customer or supplier contracts, outstanding HR issues, etc. Some items will be addressed in the normal course of closing, but you have an opportunity to really make the business shine and set the business and Chris up for success.
Possible initiatives to mitigate your risk…
- Do whatever you can to set your successor and the business up to succeed on their own. Remember, you are positioning to protect your successor’s continued livelihood and possibly that of their family, your employees, and your own retirement (if still financially involved)! The downside in NOT doing it right may be the need to go back to work in the business!
- Use the opportunity to set a road map for the NEXT 10 years of business, to establish a new culture and tone if needed, and to empower your management team. Your successor will need all the support and dedication he/she can get.
- The above ‘closing date’ may or may not be the same as your ‘retirement’ date. Your continued involvement in the business will depend upon your continued interest to stay involved, the needs of the business, and your successor’s enthusiasm and appreciation for your continued support.
In my work with clients and in discussions with others that have gone through this process, I have come to realize that there are usually several war stories and unique experiences for every business that has been passed down. Virtually everyone has a story to tell, a unique perspective, and great advice to pass along. Not always pleasant, or successful. Your feedback, comments and contribution to the discussion are strongly encouraged and invited.
In Summary: Please don’t let your last business transaction unintentionally be your worst! Be organized and prepared, engage/empower the talent & experience of your management team, be objective and seek outside experience if necessary, communicate, and be proud of what you have accomplished and what you are passing on. You’ve done well, and hopefully you’ve positioned your successor to do just as well and hopefully better. It’s the best legacy you can pass on!
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