You’ve put a lot of sweat and tears into building your business and you’re proud of your accomplishment. But, how do you know when you’re ready to move on?
There are so many questions to ask yourself. For me, my business was sparked by my passion for writing. It grew from my desire to help small business owners promote their own businesses. When it’s time for me to hang up my hat — or in my case, put down my pen! — the process will include thinking about my own desire for writing, as well as, who will serve my customers who have relied on me for support.
Exiting a business isn’t something you should think about when you’re ready to close the door. It takes careful thought and preparation. You should think about it well in advance and depending on the size and nature of your business, years in advance. You need a plan.
Here are some questions to get you started.
Will you dissolve the business or will you just downsize it so you have more free time?
Do you want to stay involved in your business or give it up completely? If you stay involved, how much?
If your plan is to stay involved, maybe even keep ownership but step back, how involved do you want to be in the day-to-day decision making? Are you the type of person who can sit back and watch it happen without being engaged in the planning? This might be particularly difficult, if you’re the head of a family business and your plan is to transition the decision making to your children.
Your plan for transition should also include a timeline of events that cover everything from when you’ll exit the business to when and how you’ll communicate the change to your employees and your customers. You’ll value the help of a communication expert to create a smooth transition and spin a positive message. In addition to communicating the change, your communication plan will include items like your website, social spaces, signage and directory listings.
Prepare your buyer for success
Seeing someone new take over your life’s work doesn’t mean you want to see it fail. You’ll want to take time to pass along your current business strategy and what makes your business what it is today. Introduce the key players and what value each brings to the success of the business and help share information about the customer relationships that are in place. This will be important moving forward. The new leader or business owner will want to continue to nurture and grow these relationships as they introduce change.
A note about your brand
As you know, brands carry a lot of weight in the marketplace. There’s inherent value in a well-known brand. Will the current brand remain or will there be a rebrand?
I recently spoke to a small business owner who purchased a new business. Rather than keeping the current brand, he rebranded his business under a new name. He didn’t promote the new brand and communicate the change in branding or ownership. He maintained the existing marketing but operated under the new name. Without a plan to promote the new brand, this created brand confusion. As customers continued to call the previous company, they reached the new office. Each contact required an explanation of the change in ownership and services. Not only did this create customer confusion, the new owner missed an opportunity to promote a new brand with a new promise of added value and enhanced experiences.
Give some thought to your small business. Even if you’re not ready to transition, building a plan now to prepare for your next step will make the move so much easier.
The BDC* provides 4 tips to ensure a smooth transition. These cover negotiating a favourable sale, planning the transition with the buyer, communicating with your employees and partners and being prepared to let go.
Now get to it!
*The BDC (Business Development Bank of Canada) is a financial institution devoted to helping Canadian entrepreneurs build successful businesses.