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.
THE SHARPENING STONE
Sharpening Stone is a series of short videos from True Edge designed to sharpen leaders and their organizations.
Interested in learning more about the content below, and how to apply it to solving challenges in your business? Contact us today.
About the Author: Rob Skacel, Ph.D.
Rob is a licensed psychologist with senior executive experience. He holds a Bachelor’s degree from Franklin & Marshall College, and Master’s and Doctoral degrees from Purdue University. Rob began his career in the field of clinical psychology, splitting his time between patient care and management responsibilities. Within a few years, he began the transition to business psychology specialization. He has since held senior leadership positions in sizeable for-profit and non-profit organizations, where his responsibilities focused on performance improvement and organizational development.
Rob founded True Edge Performance Solutions in 2000, and maintained it as a part-time venture for a number of years as he continued to accrue executive experience. By 2006, True Edge had grown to the point where it required Rob’s full-time attention. Over the years, Rob has provided services to dozens of leaders and their organizations, in a variety of industry sectors such as manufacturing, professional services, health care, agribusiness, construction, education, non-profit, and trade associations.