Business Succession – is there a right time?

I met a woman recently, Sally, who was telling me about the business she and her husband has created over the last ten years.   Sally is 62 years and her husband is 65 years.  They started this business in their garage as a hobby at the weekends and it has now turned into a very successful full time business for them both.    The business grew out of a love of sport and enabled them both to stay involved after their competing days were over.  The business requires them or their staff to work at events in the weekends.    I met Sally at a wedding we were both attending but she was attending on her own as the business required either she or her husband to be working most weekends.    This scenario is one I have heard many times over the last ten or eleven years.   A successful business that has grown out of a hobby or interest or opportunity that eventually becomes a noose around the neck of the owners.  I had the same experience myself with my former business… at the end it felt like we had created a monster!

So what can you do to start thinking about downsizing, letting go or selling your business?  Here are some questions to ask yourself to get you on your way.

1. Is your business an Asset? You need to know whether your business has any value if you want to SELL it.  If you don’t know, it is worth the investment in a business valuation to establish your way forward.  Once you have a valuation, you can decide when you want to capitalise/realise your asset.  For example, in my previous business, we had it valued but also checked out whether we could increase that value by investing some more time, money and strategy in a two year plan.  The business took on a new focus which was for us to be much more strategic with our asset to deliver the best selling potential.
2. How important are you to the operational success of your business? If you were hit by a bus tomorrow, would your clients still receive your service or product from your business? If the answer is Yes, then you need to continue on that path to ensure that a future purchaser would be confident that when you leave the business, the Asset will still deliver a good income.  If the answer is No, then you need to start thinking about removing yourself from the day to day operations of the business.  Who do you have in your business already that you could up skill to take on more operational responsibility? What processes and procedures do you need to document and initiate to create this hands off environment for your business?
3. Who do you know in or outside the business who might be interested in purchasing your Asset? Staff buy out is a perfect solution or do you have a competitor who might be interested in growing by acquisition?
4. How long would you be prepared to stay on in the business when it sells? Any new owner would probably want to ensure continuity for clients so there may be an expectation that you will stay for a period in a part-time or full-time capacity.
5. What would you do if you sold? Start thinking and talking about your future Life/Work Design. If you find this hard, employ a Life Design Coach or Advisor who can challenge you to work towards your perfect Refirement!