Buzz Harris: Why business sellers should look at alternatives (Voices)
You must consider an alternative exit strategy, namely succession planning.
With the sale of a business, sellers move into a new phase of their lives to start new pursuits away from it. In contrast, a succession plan for a seller means less time at the business, but not a complete separation.
Successors can be beneficial to the seller because they are usually eager to make their mark on the business. Often, successors see current issues and upcoming trends more clearly than the outgoing owner does.
However, the greatest challenge might be finding the right successor. It starts with the outgoing owner figuring out what kind of person is best for the company. This is not an easy task.
The current owner’s next step is surveying the landscape within and outside the company. The prospective replacement’s talents not only need to be examined, but also their willingness to take the job.
Once the chosen candidate is identified, the owner needs to determine the additional skills the replacements need and devise a training plan to ensure development.
When the successor is close to being ready, it is often a good idea to give the understudy a “dress rehearsal.” For some owners, this can mean taking an extended vacation or beginning to work part time.
With this exit strategy, while the outgoing owner is resolving some of his work-related issues, he may also be creating some new problems.
For example, the exiting owner needs to be aware of the sensitivities of those who were not chosen. These employees may choose to leave the company or become trouble-making malcontents.
Buzz Harris, a Licensed Business Broker with The Liberty Group of Nevada, writes a recurring Voices column for the Northern Nevada Business Weekly. Contact him at 775-825-3948 or via email at BHarris@TheLibertyGroupofNevada.com.
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