Are you a business owner looking toward your eventual exit but worried the process could negatively impact your company and its people? Business succession planning can involve a lot of emotions, but you can channel them to focus on the values that got you and your business to this point. In fact, developing an actionable plan to chart a path toward new leadership is often more effective when you leave emotion behind.
That usually means bringing in an outside perspective. Longtime owners are often deep in the weeds around their business (and why wouldn’t they be, since they’ve lived and breathed every part of it for years). Relying on a trusted advisor to provide an external lens – and objective counsel – on the situation can be extremely valuable.
We’ve worked with many clients over the years to help develop and implement succession planning strategies, working closely with their family members and other trusted advisors. And while every business owner has unique criteria for what a successful exit strategy looks like, and evaluates their options differently, there are common considerations:
How will your values drive your succession plan? Our perspective at JNBA is that business succession should be a reflection of your values and ethics you’ve lived and demonstrated your entire career. If you’ve always valued your team and clients, now is not the time to divert from your core approach. Think of it this way: Is it the right choice to sell your business to an organization that isn’t aligned with your company’s culture and maybe take home a few more dollars while potentially leaving a damaged legacy to your employees and customers? Is it worth it?
Are you willing to do what it takes to make this work for all stakeholders? Bigger thinkers often already know (and live) the fact that the business is not just about you, the founder, or owner. Many people, from employees to strategic partners to customers, have helped you build your business. And now, as you’re considering next steps, it’s an opportunity to make sure everybody benefits. I always ask: Are you planning to give away some pieces of your pie to the people who have helped you along the way – or are you going to merely throw them crumbs?
What will your customers and employees think of your plan? Consider your succession plan from your customers’ and employees’ perspectives. Bring the leadership team into discussions around succession planning not only to hear other points of view, but also to make sure that everyone is singing from the same songbook after a decision is made as well as to reinforce and project a unified strategy. And when the time is right, communicate your strategy and next steps to your employees and customers. This is a rare opportunity to craft a well-thought-out plan that can actually raise the bar above the level of products or services you’re already providing.
You’ve built your business with decades of hard work, and if you’re starting to look at an exit strategy, the most important thing you can do is to ensure your company, and its customers and employees, will not only survive your eventual absence, but thrive.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
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