In This Episode
It’s rare that a small business owner wakes up one morning and decides it’s time to transition their business to the next generation. It’s something they usually think about for a while, likely many years before they are finally ready. But once they decide they often want it to happen yesterday. But before the current owner leaves they want to make sure the next generation knows everything they need to know about the business. So how do you figure out where to start?
If this describes you at this point, take a deep breath and slow down. As you’ve heard us discuss before, your primary role as owner and CEO is to Plan Direct and Control the business. So this is what you want to be teaching the next generation. Unfortunately too many owners focus more on the delivery of the Products and Services of the business vs. the Planning Directing and Controlling part.
When we coach families on transitioning their business to the next generation we use our 7 Keys to Success framework to guide the discussion. This helps to keep things focused on the most important aspects of the business. Chances are the next generation is pretty knowledgeable and might even be better at the delivery of the company’s Products and Services than the current ownership at this point. It’s all that “business” stuff that is really important. Enter MVP’s 7 Keys.
The goal is to get the next generation to master these 7 Keys. Usually one of the 7 needs a little more love and attention than others but the key is to get started on mastering all of them. The numbers are pretty important so things like the Profit Plan and Cash Flow Forecasting are key to understand and bring some calmness and clarity to the organization. It’s also key to understand how business is generated and how the Marketing Plan can drive increased sales and profitability. And the next generation can’t do it all on their own so what kind of people need to be added to the Organization to provide them the kind of support necessary to be successful.
And that’s all before we even talk about structuring and paying for the buy out of the business which is likely going to be funded in part or in whole by the current generation. Wouldn’t you feel better as the soon to be prior owner if you knew the next generation was running the business in a way that will guarantee your future payments and keep you from having to jump back into the business?
People, Companies and Resources We Mentioned in the Show
- MVP’s 7 Keys to Success (https://maximumvp.com/7-keys-to-success/)
- Spock of Star Trek of Mind Meld (https://www.startrek.com/database_article/mind-meld-vulcan)