One of the most satisfying and rewarding aspects of being an owner manager is seeing the development of your team. To know you have played a part in the progress of key individuals and the team overall is something of which to be proud.
In addition this team development can be a major driver of growth and improvement for your business.
In the realms of exit planning team development has a number of benefits. Three principal ones are explored in our latest article.
This year’s Henchards Christmas business lunch was a great success. A record attendance after over ten years of hosting these monthly events, great fun, people making new connections and money raised through two raffles for our nominated charity Woking & Sam...
Hopefully you enjoy owning your business; financially it works well, it provides work and life satisfaction, and you get additional benefits of creating jobs and being a positive presence in your local community. Furthermore, within the company you have aspiring future business owners and entrepreneurs who have benefitted from your guidance, who may one day take it over.
A question: if you have another five years before stepping back or selling up how would you use it?
It still comes as a surprise when I hear, “I’ll deal with my business exit it when I get there” and, “My business exit will all happen in one go.” But after many years and many thousands of conversations perhaps it shouldn’t. That’s the danger of being close to a subject – the assumption that everyone else sees the world as you do.
Yes, you can leave your business exit to the end, and it may all happen in one go! However, there is a very real possibility of you being disappointed if you take that approach.
There are times when you consider the bigger questions, when you consider what you want to do in the future. Sometimes this comes on the back of a period of strong growth and success when you may feel it’s time to make the most of the value you’ve built in the business; sometimes it’s in a period of difficult trading when either you feel you had enough or just can’t see a way through; and sometimes it’s simply that you’ve become a little stale, perhaps even bored with doing the same stuff.
If you’ve reached a point where you are contemplating ‘what next?’ it helps to share your thoughts and get help, guidance and ideas on the options open to you, how you decide between options and what you need to do to make your choice a success.
When starting out on your business venture, exit planning may the last thing on your mind. In reality it should be the first.
If exit planning is all about ‘getting out’ or ‘selling up’ then you may ask why expend time and energy on it when your priority is to get the business moving and getting revenue in the door? The reason is simple: you want to know you are doing the right things in building and scaling your business so that one day you can maximise the rewards from your efforts. You can’t do that without planning with the end in mind.
Good practice tells us we should have business continuity plans so that in the event of a problem affecting the business we can continue trading with as little impact as possible.
One of the scenarios in a good business continuity plan is to assess the consequences and mitigate the negative effects of key people being unavailable – including the business owner(s). For a small to medium size business one of the critical points of failure is the owner. Take them out of the operation, even for a short time, and the impact can be severe and sometimes long-lasting.
Exit planning has many different connotations, it’s a very subjective phrase. For some, it provokes a sense of finality – a perceived ‘cliff edge’ of business ownership and involvement coming to an end. Contemplating the finish of what has hopefully been a successful and rewarding business journey can be a salutary experience and raises questions about your legacy, what you do next, your self-perception of being a ‘former’ business owner, and for some the implications of a life stage shift into some form of retirement.
You may think an exit plan is all about selling your business. Not so; you can achieve a successful exit without a sale. That may seem a contradiction in terms, but your exit doesn’t mean you have to give up your ownership.
The most frequent response we get to asking a business owner about their exit plan is, “I’m not ready to sell yet”. However, when we ask about plans to spend less time in the business, delegate more and reduce the dependency on them the response is far more positive – at least in intent if not in the form of a meaningful plan.
Good exit planning fully addresses how you reduce your time commitment to the business whilst making the business stronger and more attractive to a future investor or buyer.
In a consecutive number of weeks, three business owners presented the same challenge to us: I want to stop working in my business, but I want to retain my ownership.
The three situations were different, but all shared the common thread of distinguishing between an owner’s time spent in the business from the money they have as a virtue of their ownership. For one owner it was desirable to step away from the business to get married, travel and start a family; for another it was having two businesses that created the need to step away from one to focus on the other; and the third owner is planning to row across the Atlantic, a challenge that will take months to train for and accomplish.
In all cases they want the option to retain their ownership and have the potential to get involved again in the future.
We have talked to other business owners and they are taken aback that we forecast our revenues, costs and cash flow
We’ve written a number of guides on selected business subjects that will set you and your business in good stead for whatever future you may choose.
These are free for you to download and to make use of in your business, so please help yourself.