I was meeting with a prospective client in our offices in Dallas a few years ago and as we discussed the business and its future, he sheepishly turned to me and said,
“You know I used to think that I was key to the business; 20 years ago when I first started it I was. But last year I took my wife on a month-long vacation to Asia and was in areas where phone and internet access was limited. I mean, I went for days without calling the office and when I did, I learned that everything was going fine. It just showed me that I was no longer key to the operation.”
Now, he was lamenting this, sharing that he no longer was the key decision maker on daily issues that had to be handled (and even some of the larger strategic ones). But with a huge smile I told him that he should look at this as a positive, not a personal negative (yes, his ego was impacted), since he had solved one of the major issues that buyers are concerned about – succession planning.
The fact is building a “buyer ready” business requires you to do several things, but most importantly, plan for a sustainable future. As great as your history might be, buyers are buying your future, not your past. You may be a genius, very well respected in your industry, yet none of that matters to a buyer IF the company you have grown is largely dependent on you for success.
One common trait most entrepreneurs share is absolute confidence in themselves. By their very nature, this is vital to have. However, the downside is often a challenge in learning how to delegate. If you believe that you are the only mastermind in your business, delegation will be a challenge.
What buyers look for are opportunities where the business owner has made (or is in the process of making) the challenging transition from founder to leader, to mentor, and finally to emeritus guide. The good news is that with some coaching and diligence, entrepreneurs can successfully make this transition. Based on our experience it usually requires specific steps:
It is this last component that strong entrepreneurs have the biggest challenge with. Moving from the founder to leader requires the abilities to surround yourself with talented people and mentor them so that they can develop into your mid- and upper-level management team. I have worked with lots of business owners who had the best of intentions in succession planning but lacked the ability and acumen to successfully hire and build a mid-level management team.
For many, finding a mentor themselves is really helpful in this process. If you are the member of your local/regional chamber of commerce, chances are really good that you can reach out to the leadership of the group and find someone who can advise and challenge you to finalize your succession planning process.
Another great source if you can afford it is to join an organization like Vistage. This group provides CEO/executive coaching, leadership development, and business mentoring services to its members.
Another good source for entrepreneurial education is the National Center for the Middle Market. This group has a knowledge center that is designed to guide you as CEO in a number of areas, including leadership development and succession.
One vital thought I will leave you with this: Even if you are not planning to exit for several years, succession planning can benefit the entire organization because what got you here won’t get you there.
All too often the skills it takes to found a business and grow it to $5 million are far, far different than those needed to then take it to $50 million and beyond. If you recognize this, if you understand that your strengths as an entrepreneur may be your biggest pitfalls when expanding the business even more, then surround yourself with talented people and challenge them to grow by delegating decisions and strategies to them.
If you do, you will most likely be impressed with their skills, your company’s growth, and its ability to eventually transition to a “buyer ready” business.
Carl Doerksen is the Director of Corporate Development at Generational Equity.
© 2016 Generational Equity, LLC. All Rights Reserved.
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
Generational Wealth Advisors’ affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Wealth Advisors to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Wealth Advisors is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.