Commitment – The First Step in Succession
It’s one thing to think about selling your business. It’s quite another to make the commitment. Business owners, when asked when they’d like to sell, often respond that any sale is five years out. If I see them a year later, it’s still five years. This moving target indicates to me that they haven’t thought seriously about succession planning. Five years is a nice number…close enough to convince yourself (and your spouse) that you’re thinking about it, distant enough to put off.
The target becomes real if you attach an actual date to it. Each month, each quarter, each year you’re getting closer. The target, and your commitment to it, begins to act as a natural, subconscious pressure for change. It triggers different decisions. You pick up brochures on retirement. You think about luxury items you might like to own when you get your buy-out. You focus more on your bottom line so you can make your EBITDA look good. You start to delegate more, mentor or train your leadership team, and talk to your professional advisors.
Once you make the commitment – even just to yourself, a whole stream of events begins. You’ll get calls from brokers who say they have a buyer. An employee will step up and indicate an interest in taking on more responsibility. Seminars, books and articles on business transition, that you never noticed before, will begin to appear. A competitor or vendor will ask casually if you’ve ever considered selling.
Commitment is strengthened when you put it on paper. So set a goal. Write the date, the dollar amount you want to get, the terms that would satisfy you, the conditions you’d like to include, and the action steps you’ll have to take to make it happen. Develop a strategy that you can pursue.
What happens if you don’t commit? Not much. And that’s the problem.
November 4, 2014
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