Kim Neeson is an award-winning entrepreneur, executive leader and coach at Kim Neeson Coach | Consultant | Mentor.
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As an entrepreneur, you work for years and years building up your business, and hopefully by the time you’ve hit your second decade (or earlier!) you’ve hit your stride and have established a well-run business that pays you well for your efforts.
While you are building, you are also aging. In the blink of an eye, people you know are either talking about or are retiring. Perhaps they’ve decided to pursue another passion. Between the changes of those around you and your own aging, you begin to think about your own next chapter.
Make plans early.
The time to think about your next stage isn’t when it’s thrust upon you; it’s when you have the luxury of time and the ability to put whatever plans you develop in motion. At the end of it all, are you in a big job that will just end one day, or are you creating a business that can carry on through a buy-out, continuing with key employees doing most of the heavy lifting, or handing the reins over to family?
Plan A, B or C?
To come up with possible plans, it’s important to have clarity, vision and goals. What do you want? Why do you want it? When do you want it by? How will you get it? Is there more than one option? If so, what is the preferred option (Plan A), the secondary option (Plan B), etc.? These are big questions that require deep thought, dissection and a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). Here are a few examples of plans you may want to consider.
• Sell your business.
There are a lot of questions involved with this plan. Who are the possible buyers? What do you need to do to make the business less about you and more about your products or services? What infrastructure needs to be put in place or improved? Do you have the right key people in place that will stay after the sale? Are your financials in order? How will you emotionally part with your “baby”? These are just a few questions you’ll need to ask yourself and your advisors.
• Work your business until you retire.
This is an obvious one, and it means you close your doors when you’re done. How will you feel, closing the doors for the last time? Will you have regrets that you didn’t try to sell? How will you celebrate all that you accomplished? Planning should include preparing for severance packages for your employees, lease run-down, sell-off/disposal of equipment and other such preparations.
• Incentivise key employee(s) to run the business as you gradually work yourself (mostly) out.
Can you identify one or two employees who could run your business? If so, what other skill sets, mentoring or experience do they require? Are you willing to let go, knowing they aren’t you but will act in the best interests of the company to the best of their skill and ability? How will you keep them invested for the long term? Will you gift them or allow them to buy shares in the company? How will you ensure that you gradually remove yourself from the day-to-day running of the business? With a key employee, you have the benefit of knowing their strengths and weaknesses. By providing either the education/experience that needs shoring up, or hiring additional help or a trusted consultant who can fill a particular void, you will ensure the successful continuation of the business without your continual presence. The key to this option is identification, preparation and a lot of trust.
• Have member(s) of your family take over the business.
This may be one of the trickiest options of all. Family is personal first and foremost. Can you view your family members in a purely business way, and keep personal feelings and conflicts separate? Even more important, can you treat your daughter as an equal in the business? Your son as a respected and valued member of the team? Or will you revert to treating them like your children? Questions such as these must be answered — for everyone involved. Will your niece always accede to you because you’re her aunt, and therefore not take responsibility as she should? What happens if your brother-in-law breaks up with your sister? If you don’t have a headache by now, you surely will as you go through all the machinations of having family take over your business. An iron-clad contract is a must in a family situation. Therapy and coaching would be a good idea as well. The last thing you’d want is to lose beloved members of your family over business.
Lay out your roadmap.
It’s a necessity that entrepreneurs think about the future. By taking the time to ask yourself the tough questions and being totally honest in your answers, you’ll be guided to where you want to go. It’s like a roadmap: What’s your destination? How are you going to get there? Like any trip, there will be detours, delays and misadventures along the way but still, you know where you’re going. Leverage smart resources like your business lawyer, your accountant, your banker and your coach so you can ensure that you explore all angles of your future destination. Without a map, you’re just driving around with a lot of unnecessary detours and stops.
You created a business. You can create an exit strategy.
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