One of the most emotional decisions an entrepreneur eventually has to face is knowing when to let go of the business. Proper preparation can require years of planning, whether the goal is to sell or pass leadership on to a new officer.
It begins with recognizing that the future of the company depends on owners becoming increasingly irrelevant to its success. This may be counter to their DNA, but keeping up with industry technologies, techniques and trends is better gradually left to a company’s successors.
Rather than fear this change and wait for nature to take its course, entrepreneurs should strive to make the business more attractive for an acquisition or easier to take over by incoming executives.
How do you ready your enterprise for this transformation?
■ Hire people who are different and smarter than you. Your business will be more well-rounded and valuable if it’s based on complementary personalities and skill types.
■ Make staff development a priority. Train for workforce gaps, and offer technical and leadership training that moves employees up.
■ Communicate your long-term vision. Don’t let managers mistake your absence for apathy.
■ Let employees fail a little but not miserably. Empowerment and growth begin by allowing people to make their own decisions. Assist just enough to keep mistakes from being epic.
■ Provide team-based incentives. Your firm will be more successful when everyone strives for common goals. Top individual performers will rise naturally.
How do you prepare yourself?
■ Set the intention for your company’s future. Decide whether you’ll sell or grant leadership to family, senior employees or new directors. Be open to possibilities.
■ Have a vision for your next venture. Will you serve on the board, consult, remove yourself completely or just retire?
■ Suspend your pride and ego. Remind yourself you have nothing left to prove, and help groom your team to do an even better job than you did.
■ Plan, plan, plan. Determine the timeline for your departure, and account for all financial, operational, technical, training and other resources needed for a seamless changeover.
■ Engage others. Share your exit strategy with advisers and peers, knowing that the execution of the plan and final decisions are up to you.
Even with years of planning, it takes being comfortable with the unknown to head your company and yourself forward. The key is objectivity and not moving too fast or too slow. Like the end of a TV series or pro athlete’s career, going out on top is better than hanging on beyond your peak.
Becoming obsolete to your business frees you up to be more influential elsewhere, and it helps secure the future of your legacy. Know that everything will be OK because you planned it that way.
Eric is a regional and national EY Entrepreneur Of The Year® whose business has been ranked No. 1 on the Weatherhead 100. (216) 592-8355, ext. 223, [email protected], www.magnusig.com
