Maybe you’re thinking of selling your business. Now, or maybe ten years from now. Here are some considerations that have probably crossed your mind already:
What is my business worth?
Who could I sell it to?
How can I be sure I’ll get paid, especially if the next owner is not successful with it?
Will I have enough after the sale to maintain my lifestyle?
What are the mechanics of the transaction?
These are all things you should be considering. And you should be relying on your accountant, your financial planner, and your attorney to address these concerns and formulate your plans. It is critical to give proper attention to the financial and legal aspects of a business transition.
But what many exiting business owners overlook are the human aspects of the sale. Look, I wouldn’t fault any buyer or seller for focusing on the dollars involved in the transaction itself. But for just about everyone else in the organization, and perhaps also your key customers and vendors, the leadership transition is a top concern. All of those folks are wondering, and maybe worrying, about what the change in leadership will mean for them. Why should you care about this? You’ll be gone, right?
If you sell to existing employees or family members, you’ll want solid leaders to replace you because chances are they’ll be paying you out of the profits of the business. If these new leaders lack the skills necessary to run the business profitably, and to attract and keep good employees after you exit, then you may not get paid.
Even if you manage to obtain full payment up front, you’ll want to start raising up other leaders ahead of the sale so that your business is decreasingly dependent upon you. If your business depends on you in order to succeed, and you don’t come with the sale of the business, your business will be less valuable to a potential buyer. You won’t get top dollar.
Look, there are many advantages to building leadership bench strength in your business, at any point. Even moreso if your own exit is on the horizon. If you want to see your business outlive you, and if you aim to maximize its value when you sell, now is the time to develop emerging leaders.