So many entrepreneurs and small business owners as well as nonprofit leaders are so reluctant to deal with their own aging process and the need to plan for emergency and their exit from the organizations they have built and nurtured. Many feel vital and alive and love the work that has become a major part of the lives and identity. This is natural.
And if you want to protect your legacy, planning for the unexpected and your eventual departure from the organization is the responsible thing to do. At some point, your energy will change and you will want to do something new or at least change how you work.
There are 4 traditional exit strategies for businesses include:
- Die in the seat
- Sell the business
- Transition to family member
- Dissolve or close the business
Each of these strategies require about 5 years of planning and preparation if the transition is to be optimally successful. Whether you want to work until your last days on the planet, sell the business or transition to family member, there are some key preparations you need to do.
- Document your processes and procedures
- Clean up your paperwork and documentation, files, etc.
- Have an emergency management strategy – someone who knows how to access key logins and passwords to your computer, your calendar, email, client information, bank accounts, and other key documentation so your business will continue if one day you can’t come to work or choose not to – because you could get sick or hit the lottery…
- Identify and train a 2nd in command and get them up to speed to deal with emergency management and start sharing your relationships with vendors and customers with them so that they can have those relationships when needed.
- Increase revenue earnings so the business has sustaining power, financial value if you plan to sell and/or enough revenue for you to retire and your successor to have financial security they need. Especially if its one or more of your children.
This is really important for charismatic entrepreneurs who are the primary rainmaker/sales person/revenue generator. The company has no value if it is not profitable without that leader. Making that transition is critical to increasing the value and sustainability of the company.
If you are ready to explore your exit strategy, first you may want to explore what you will do when you are not running your company. What will your “third act” look like? How do you want to live in the later part of your life? What do you want to be doing? What contribution do you want to make? Join me in exploring these questions and more on August 22, 2018 in my upcoming webinar, Planning for Your Third Act.