Build Your Bench Strength

meeting-2284501_1280.jpg

The best teams have:

·        Members with diverse and complementary skills and competencies

·        Who can work together productively to deliver results against an effective strategic plan.

We believe that if you have a great team, they can build and execute a great plan. And if you start with a great plan, you can find talented people who can either make your plan even better, or get aligned and excited about the plan you have. The issue is -- you already have a team. If they are not already a great team – how do you figure out who has the potential to take your business to the next level and get them there!? There are several indicators you can look at:

1.     Competency assessments will provide a clear picture of potential across a range of different critical skill areas.

2.     Style indicators tell you how people prefer to interact with each other and who has natural tendencies to lead, follow and rebel. You can then decide what mix you need and where in the organization you need them.

3.     Measurable results will tell you who can really get things done.

4.     Motivation and initiative will tell you who will push the organization (and maybe you) to higher standards and expectations or leave if they cannot make a big enough impact.

Who do you need to look at in your organization? Who meets or exceeds your criteria? Nurture those strong performers and give them opportunities to learn and grow and you will see the impact in your results.

Making a Relationship Sale

Factors Influencing Your ‘Relationship Sale’ 

Depositphotos_78746658_original.jpg

We define a ‘Relationship Sale’ as a sale to a family member or key employee -- someone you have a ‘relationship’ with in the business already. When planning your exit strategy, a ‘relationship sale’ to a family member or to a key employee can be easier, and perhaps more reassuring, than finding an outside buyer. But many business owners will need to finance the sale of the business, especially if their chosen successor does not have the financial means to cash you out of the business. If you suspect this may be case, keep reading to learn how to make your relationship sale a more successful one.

·       Start Now

Creating a successful relationship sale is a time consuming process; a lot of hard work and planning must go into a productive sale. Starting early will ensure that you will have the time to work out details and enhance your business while you are still in control. And if you encounter a few bumps in the road, which you will,  it won’t throw the entire plan off course.

·       Know It’s Going to Take a Few Years.

A relationship sale to a key employee or capable family member takes time. The current business owner must be willing to commit to remain in control for between three and eight more years, preparing the business and the successor. If you do not have this time, you may need to explore other options.

·       Define What You Want Most From the Business.

Ask yourself what do you want to get out of your business once you have exited. Knowing what is important to you will make planning for your exit a lot easier. Do you need a certain amount of money to maintain your lifestyle? Do you want to exit by a certain date, or birthday? Do you want to define a family legacy? Do you want to create a sustainable business that stands the test of time? Knowing these things before the relationship sale is of the utmost importance.

·       Assess Options

Your exit plan will inevitably begin with consideration of all of your options. Some find it useful to write down each option and evaluate the business benefit, employee benefit and personal/owner benefit. With this objective view, you can map out your plan.

·       Share Your Exit Plan – Appropriately

When the time is right, you’ll want to share your plan -- not with anyone and everyone, but first with the critical people who need to be aligned to make it happen. Most owners are concerned that by sharing their plan, their best employees will flee. It’s possible they will, but if you have built a plan that demonstrates legitimate opportunities for growth and they can see themselves as a key piece of that plan, they probably won’t. Offering them golden handcuffs or other incentives may be wise, if they are truly key to your business.

Sharing it will take some flexibility away, but it is an absolutely essential step. You need the key people to know your exit plan and to take it seriously, and without a written plan it is harder to get that respect. You are already working with your buyer so having the option to show them your plan, gain their support and alignment to it, and to be able to discuss and edit your exit plan as time goes on is mutually beneficial. It makes the transfer smoother, giving you an advantage that an outside sale would not.

·       Grow the Value of Your Business

The more valuable your business is, the bigger profit you get once you sell it. Buyers will value (and of course pay more for) your business more if it has the potential to keep growing. Not every owner wants or needs the big payout. Increased business value can also position your capable family members or key employees for their own success and leave you with the pride of business legacy.

·       Groom Capable Key Employees or Family Who Desire Ownership

A team of leaders that can operate and run your business without you is highly valuable to any buyer. In a relationship sale, it is critical that the new owner be willing to invest in their business, personally and financially. Developing and grooming your team before you leave is crucial.

·       Ensure Your Buyer is Ready for New Role

Transferring ownership too soon or to an ill prepared employee or family member can be detrimental. The new owner must be prepared for his/her new role. Being a CEO/Owner requires a very different level of responsibility than a C-Suite role. The risks are far greater. If your buyer is not ready, be prepared to stay an extra few years to build their skills, experience, confidence and competence…. Or be prepared to step back into the business if it falters.

·       Expect to Finance the Sale of the Business

Make sure that your buyer realizes that they will have to invest real money to buy the business. Drawing out a financing plan will make it more likely that you get what you need and want out of the sale, and will give you confidence that the new owner is capable of paying you the full value of your business. Often in a relationship sale, owner financing is done through the cash flow in the business.

Keeping these factors in mind when preparing for a relationship sale will help you make a successful sale to a key employee or family member. Good luck!



“What’s Next?” – Creating a Fulfilling Life After Retirement

cottage-1550083_1280.jpg

As you get ready to ramp down from your full time business role, many start to ask the question “What’s next?” While everyone has ideas about how they would like to spend their next phase of life, the reality is that few actually know how their time will truly be spent. Generally speaking, most people want their lives to be purposeful and meaningful, and retirement is no different.

Establishing a plan about the goals and aspirations you wish to reach during your golden years is a great place to start to help avoid the emotional loss most owners feel as they ramp down or exit their business. Sitting down and truly thinking of what you would like to do and what kind of an impact you want to make, is important to do well before you actually exit. Of course, our life priorities change with each life experience, and it may be hard to know exactly what we will want in the future, but creating a basic framework is important so you live the life you have dreamed of living.

According to multiple studies, most retirees are concerned first and foremost about having enough money to get them through their retirement in a joyous and comfortable nature. A study done by the Bureau of Labor, which was published by the Wall Street Journal in 2014, asked pre-retirement Boomers what their top concerns after retirement would be. Of course “having enough money” was at the top of everyone’s list, but after that came:

1. Health

2. My partner’s health

3. Will I need to work?

4. Where will I live?

5. Will I be bored?

The concerns are general, yes, but important to think about nonetheless. The second part of their survey asked what the vision of their post retired lives would look like. The top five came out to be – Joyous, Purposeful, Inspiring, Educational, and Strong. So, looking at the common concerns and aspirations, the question still begs to ask “What is next for you?”

Although most professionals look forward to retirement, the loss that comes with exiting a business can be traumatic. Careers give us a sense of self-worth and belonging in a community. Once you’ve left that ‘community’ of work, it is extremely important to continue to actively engage in some meaningful way. Without doing so, both mental and physical health may suffer. It’s easy to get stuck sleeping late and watching lots of TV. According to the Bureau of Labor survey, the most time consuming activities of the average retiree are sleeping, followed by watching TV/movies. Activities like eating, socializing, reading, cleaning, and exercising were significantly less time consuming on a daily basis. We cannot stress enough how important it is to stay active in your community, revisit or start new activities that are meaningful, and exercise.   

 Living a healthy, happy, and fulfilling life can be tricky at any age. If your top worry is your health, join a gym, start walking, take tennis lessons, explore different forms of exercising. If your top worry is boredom, identify your strengths and passions and network with people to find meaningful ways to contribute. If you are worried about losing your community connections, plan to travel, join a club, get together with colleagues over lunch or drinks. The possibilities for involvement and entertainment are endless! It really is just up to you to decide which would contribute to helping you feel happy, healthy, and fulfilled.