It’s a new year! And while it may not feel that much different than the challenging one we left behind, it’s still traditionally a time to assess our current situation and make a resolution to change things that need to be changed. Often, we try to look at ourselves objectively and determine if we need to reconnect with loved ones, grow in our faith, or perhaps loose a few pounds. We need to do the same thing with our businesses, and I’d like to focus today on a very common area: Owner involvement.
If you look objectively at your business and realize that, without you, the business would come to a grinding halt…you may have a problem. At best, your family would be left struggling if something unforeseen pops up such as a health issue or an accident. At worst, your business may not be sellable meaning the business would have to be shut down and employees laid off. If you cannot be easily replaced, a buyer won’t be able to see themselves (or anyone else) stepping into your shoes without risk and disruption. Simply put: If you are the linchpin in your business, your New Year’s Resolution should be to develop a plan to allow the business to run without you.
You don’t necessarily have to transition into retirement to accomplish this. You can minimize risk by cross-training one or more employees who can keep the business running at peak performance while you’re away. If you’re more aggressive, start training a #2 person who knows everything about the business and can run it seamlessly at the drop of a hat. Not sure if you’re well positioned? Take a month (or even a week) off, sit on the beach, and see how it goes! By the way, this applies to family members too. If your wife, kids, or extended family will exit the business when you do, a buyer not only has to replace you, but other positions as well.
We wish you a happy and healthy 2021. We also invite you to contact us if you want to have a private conversation about buying or selling a business in this new year.