Preparing Your Team For Your Exit
An exit strategy is a vital part of running a business and you’d be surprised how few business owners plan their departure. It is not solely about generating the most value out of your business and having your books in order, your management team need to be prepared for what is next. It is never too early to start planning and you should aim to begin around three to five years before your exit.
Know your objectives, know what you want from your exit and how much you want for your business.
- Do you want to sell your business to a trade competitor?
- Is a family member or your management team going to take over your business?
- Is your business ready for sale?
- Do you want to exit completely, or to stay involved – as Chair, or a consultant, perhaps?
Answering these questions will help to influence your exit strategy. Set your goals and stick to them, there is no shame in saying no to a deal that you do not want.
When planning your exit, you need to know how to communicate your plans to your team. It is vital that you know the right people to communicate to and the right time to tell them. You don’t want to spook your team by telling them too early when they haven’t been properly prepared. They may fear that their job security is on the line and panic, especially if you’re selling to an external buyer.
Make yourself as redundant to the business as possible before you leave. Minimise the impact of your departure by sharing your responsibilities with trusted members of your management team. Prepare them for what is next and help them to understand the next steps. Show them that without you the business can continue to run smoothly. Transfer your knowledge and experience over to your successors so they are ready to keep the business running. Passing your insight will not only allow the business to survive but thrive after your exit.
Provide extra training for your team and offer leadership courses to help them feel safer and more comfortable in taking your responsibilities after you have left. By providing new learning opportunities, you can prepare your management team to transition into your role smoothly reducing any stress they may be feeling.
Don’t Forget Your Customers
When planning your exit, you must keep in mind your customers. If they find out you’re leaving, they may panic, think the business is failing and go to one of your competitors. Reassure them that everything is going to keep running efficiently and that your management team can deliver quality service at the highest standards. Pass on any key customers that you deal with to your management team before you exit as part of your preparation and guarantee that they are in safe hands.
A well-prepared team will help increase the value of your business and ensure that it survives and thrives once you have exited. Accountants and lawyers will help with the financial and legal aspects of your exit and have a vital role to play in shaping the actual transaction, but generally don’t offer the specialist help needed to identify and develop your successors. Nor are they likely to be involved early enough to help with objective planning. Researching external advisors and consultants that can help you, and appointing them at the right time, is an important part of the exit planning process. They will help you to set realistic objectives, and coach you throughout the exit process ensuring that not only you are prepared, but your business and your people are too.
If you’d like to have a chat with an expert about planning your exit strategy (and if you haven’t thought about it yet, you should!) get in touch with Peter Quintana at HGKC (Peter.Quintana@hgkc.co.uk) and if you’d like more advice on all aspects of your business it’s available from over 70 subject matter experts here