In This Episode
One of the areas we specialize in for our business coaching is helping family businesses transition to the next generation. One of the biggest gating items for a transition of any business, is the current owner deciding when it’s time to hang things up and move on to the next phase of their life. Sometimes the current owner is the last person to realize it’s time for them to move on. Why is this the case and how can that process be accelerated?
As you might imagine every case is a bit different, but there are some common threads that can help provide a path forward. One of the best places to start is asking the current owner what they plan to do when they step away from the business. You might be surprised at the answer you hear when the owner feels she is still on the front 9 when you thought they were about a hole or two away from the club house. So if you’re a current business owner, do you have an answer to this question about what you’ll do next? If not, it might be time to give this some thought.
If your goal is to die in the chair, it’s best to let that be known, especially to your key team. But even if that’s the case, you should still be preparing for that day by getting others more involved in the key day-to-day operations and the strategic planning of the business. In other words, make sure there is a person or people who understand the key things you do so it won’t be a mystery when you aren’t around any more. We’ve encountered too many cases when the owner died sooner than they were planning and the resulting chaos can be confusing, demoralizing, and can even tank the business. Not to mention the challenge of dealing with the grief of losing the boss who also might be a parent, sibling, relative, or friend.
One key tip off that it might be time for you to hang things up is that you don’t have any primary duties day in and day out. In other words, you might be feeling bored most days which is something newer business owners have a difficult time fathoming could even happen running a business. If you left on a vacation for a couple of weeks would the business miss your presence or would things just continue to run along? Perhaps things run even better without your interference and putzing around.
Another tip off might be that you’ve lost some key good employees recently. This often happens when there is a lack of clarity about the future of the business or there are things being talked about (e.g. a transition) that no one believes will actually happen. Some of these key employees might also be family members.
One other tip to look for is how much you’re enjoying owning the business. If you’ve gotten to the point where everything feels like “work” and you don’t awake with a state of excitement about your business, chances are this is a sign that maybe you need to take a step back or step away. Your gut can be pretty helpful in situations like this so be sure to pay attention to what your gut is telling you.
We don’t want to minimize this decision as most business owners are decades into their business when having to decide when it’s time to hang it up. Often, much of their identity is tied up with being a business owner and the thought of not being a business owner causes them more stress and angst than it does relief. Keep in mind that very few business owners got into business for themselves with a clear idea, or usually any idea, for how they plan to exit and pass the business on to the next generation.
People, Companies and Resources We Mentioned in the Show
- Succession (https://www.hbo.com/succession)
- Frank Jackson (https://en.wikipedia.org/wiki/Frank_G._Jackson)
- Mike Krzyzewski (https://en.wikipedia.org/wiki/Mike_Krzyzewski)
- Jim Boeheim (https://en.wikipedia.org/wiki/Jim_Boeheim)
- Jay Wright (https://en.wikipedia.org/wiki/Jay_Wright_(basketball))