How you exit your business is one of the biggest decisions you will make in your career. Unless you’ve had experience with business transitions before, it can feel overwhelming.
That’s why the perspective of those who have “been there, and done that” is so important. Former business owners who completed their own exit are an excellent source of advice on how to prepare for the change and how to avoid costly mistakes.
At Trelus, we’ve spent years engaging in deep discussions with former business owners from all walks of life who made this transition. We’ve learned from their successes and from their setbacks, mistakes, and regrets. Here are four important lessons we’ve learned about exiting a business, from the people who have done it successfully.
1. Be flexible.
As the planning and transition processes unfold, you may find that pieces of your vision don’t pan out the way you expected. Doors may close on some options. You may shift some of your goals. The deal that seemed perfect could fall through. You might even realize that this isn’t the right time to transition after all.
Flexibility is key. Be willing to consider new ideas even as you stick to your overall values and goals.
If you commit to staying with the business for a period of time to ease the new owner’s transition phase, you should be especially open to change. You may have a boss or supervisor again, after years of being your own boss. If your company is purchased by a larger organization, the speed at which you make decisions and implement changes may slow.
The truth is, you can’t control everything. When you enter the process with this reality in mind, you’re better prepared to meet, manage, and recover from curveballs.
2. Keep running your business.
This may sound obvious, but the business has to keep running even though you are devoting more time to transition prep.
Researching, planning, and executing your exit can eat up more time than you anticipated. If you let the workload slide, your revenue could suffer, and you run the risk of negatively impacting your transition.
If you shoulder a large share of the workload at your business, you will need to put in longer hours or begin delegating some of your responsibilities—likely both.
This is a superb opportunity to strengthen the overall operations of your company. Your company will be more resilient if multiple people are capable of leading its critical functions. After all, should you transition out or move into a less demanding role within the company, others will have to manage without you at some point.
Cultivate the talent on your workforce by:
- Observing the strengths of existing employees.
- Promoting workers who are ready for more responsibility.
- Bringing in additional employees to the company as needed.
3. Prepare yourself emotionally.
Even when you know that stepping away or downscaling your involvement is the right decision, you may still experience feelings of sadness and ambivalence.
Maybe you’re selling the family business and wonder if you’re being disloyal to those who came before you. Perhaps you feel nervous about how longstanding employees will react to your departure. Maybe, even though you’re excited about starting a new chapter, you will still miss the work and the people.
Consider talking through your feelings with a trusted and objective third party. You may even decide to enlist a counselor, spouse, peer or business partner to help you identify and manage conflicting feelings.
Knowing that you’re preserving the most important pieces of your legacy can help ease the understandable emotions involved in your transition. Take proactive steps to preserve the business’s best qualities. List everything you hope will continue after you’re gone, and brainstorm with advisors about how you can safeguard those things. Vet potential buyers to make sure they share those values. Lay out your business’s strengths and why they work so that new leadership understands the rationale behind preserving these key elements of success.
And, of course, it’s helpful to focus on what you’re transitioning toward, not just what you’re transitioning away from. Hold onto your vision for the next phase of your life. Let yourself get excited about these new adventures.
4. Take care of your employees.
Be considerate of your employees’ feelings and needs before, during, and after the transition process.
- Plan the best time to announce your intended transition. Knowing too far in advance can cause undue stress on employees. On the other hand, you want to avoid the appearance of keeping secrets or being dishonest. Carefully consider what your employees need to know, and when.
- Maintain open communication as much as possible. When employees and/or partners have concerns, listen to them. Seek employee input regarding what is working well at the company and what they hope will be preserved. Be intentional about boosting their morale.
- Focus on how the next leader can benefit your employees. This transition isn’t only about you. Fresh leadership can open doors to exciting new opportunities for the company.
- Vet potential buyers to ensure they’ll care for your people well. Your employees are trusting you to select their next leader, so advocate for their well-being.
Learn from those who’ve gone before you.
Of course, there is much more to exiting a business than can be shared in one blog post. If you want more insight from business owners who have successfully transitioned, let Trelus be your guide. The information in our platform is gathered from real business owners who have been through this process and want you to benefit from their experience.
Whether you’re just thinking about a potential exit or are ready to get moving, the Trelus platform was designed to help you maximize value and make tangible progress toward your best possible exit. Create your free account here to start your journey.