Corporations go on without their former leaders every day. They simply (or not so simply) find new leaders.
But what about your small company? I can’t count how many times I’ve heard a small business owner say, “My business dies with me.”
For some small businesses, that fate may be acceptable. However, you may want your business to continue after you retire, move on to other endeavors, or (gulp) die.
• You’d like to sell and thus cash in on your business
• Your customers or clients depend on you for a service or product
• You have employees and would like them to continue to work for (or own) your business
• Your children would like to take over your business
• You want the business to live on as an entity
A typical small business faces serious, but often not insurmountable, obstacles in preparing to survive after its owner is no longer able or willing to run it. In many cases, there are solutions for each.
Obstacle: You, as the owner, hold most of the important knowledge.
Solution: Start sharing, documenting and training a successor early on. This is valid whether the successor is an offspring, employee or outside buyer.
Obstacle: You run a solopreneurship and can’t envision how it can continue in your absence.
Solution: Many readers of this blog have solo practices that can’t actually be sold. Sometimes, they can get monetary value if they are able to turn specific clients over to someone else. For example, when Succeeding in Small Business blog founder Jeanne Yocum decided to devote more time to ghostwriting business books than to being a PR consultant, she turned a savings bank PR client over to another solopreneur. This was done with the agreement that Jeanne would get 10% of their take for the first year.
Jeanne set up interviews for the bank with several of her trusted long-time colleagues, and the client picked their preferred colleague to support its PR. The colleagues knew in advance that Jeanne’s 10% “commission” was the cost of getting included in the round of interviews. The bank appreciated not having to go into the open market to find a new PR consultant and they trusted Jeanne to send them only well-qualified candidates. She did this with several other clients as well, and the commission income was very helpful as she transitioned her business to a new focus.
Obstacle: You have employees but people think YOU are the business.
Solution: Get busy now, teaching, mentoring and training your staff to do more of the work and make more of the decisions. Determine which functions you should reassign to others. Have employees work with customers so they know others are part of the process. Let customers know now how integral your team is to the functioning of the business.
Obstacle: You still can’t decide what to do with the business when you are ready to head to your grass hut in Tahiti.
Solution: Examine and methodically compare each of your options. Then take action.
• Is your small business sellable? (Talk with a good business broker to get a realistic assessment of both its salability and value.)
• Do you have employees or adult kids who would like to (and are capable of) taking over? This is a tricky one. Be sure you can be comfortable with the arrangements you make, including how involved you will be with the company for how long.
• Can you reassign your clients to others, as Jeanne Yocum did?
• Write a contract detailing what you’d like to have happen to the business in case you die unexpectedly. Purchase a term life insurance policy to pay anyone who would need to be compensated in order to make this smooth succession possible.
In the end, the decision to keep running your business indefinitely, transfer it to someone else, transfer customers and clients to another professional, or close the doors gracefully (see Mark Auerbach’s excellent Succeeding article) is a very important, and very personal one.
Get advice, read up, and follow not only your pocketbook but your heart as well. And, in the words of the Star Wars Vulcan salute, “Live long and prosper.”
Michelle van Schouwen is president of van Schouwen Associates, LLC (vSA), a B2B marketing company based in Longmeadow, MA. The company is known for vSALaunch, its proprietary, modular and scalable system for B2B marketing launches, as well as its expertise in integrated marketing for B2B. Michelle plans (and hopes) for 30-year-old vSA to thrive well into the future.