Business transitions are risky undertakings. The failure rates are staggering for something that is so commonplace. Don’t panic!
Keep reading for 4 actionable steps that can help your company survive its transition.
1 – Plan ahead!
For whatever reason, retiring business owners are some of the most secretive people in the world. There are articles that say less than 7% of them tell anyone their plans until the last opportunity. Often, they don’t even consider planning until they’re faced with an offer. Successful planning should be started around 3 years in advance to be most effective.
2 – Cross-train your successor.
By cross-training whomever will take the business after you, you are given an opportunity to ensure that your vision for the company continues. It also allows the owner to see if the planned successor is capable to take over, and make any necessary changes. The lack of personal cross-training is a frequent source of failure.
3 – Invoke the 8-hour rule.
The most successful transitions are the ones where the CEO has moved himself into a non-critical role before their retirement. It’s not easy to move yourself to 8 hours of office time a week, but this aspect is crucial. It can also give you a taste of what retirement will feel like! By offloading the day to day operations to others, it allows them to gain a better understanding about the way your business operates.
4 – Look at your Processes.
Take a deep dive into the processes in all areas of your business. Are they mature enough to help your company withstand a transition? Ask yourself and the company leadership the hard questions about post-transition life. Would key people leave when you do? What does your company culture look like after you leave? Those questions only scratch the surface. Asking these questions is a tough ordeal, and requires a real willingness to engage on your part. It is a critical difference maker between failure and success.
These are just a few tips on how to get started, and by no means a comprehensive “How to Transition” guide. For that, we recommend speaking to your CPA, attorney, or a consultant. These types of conversations aren’t easy to have, and we at CIS understand that. It is never too early to start planning. Have the conversations. It very well may save your business.
At CIS, we specialize in facilitating these types of conversations. Call us at 501-420-4194 x701 for more details.