Choose Your Business Adventure, Volume 2: “Escape to Succession Acres”

You Knew This Was Coming…

Congratulations on the hard work you’ve put into building your business! Through grit, determination, and a strong measure of passion, you’ve moved from its purchase (or founding) to today — and your business is bigger, better, and stronger because of it. But you’re not getting any younger, and you realize that at some point, the life of your business will ultimately have to surpass the life of you, its owner. And there’s a place you may have heard of – Succession Acres – that's tucked away behind stately trees, where you can spend the quality time you need after business ownership is behind you.

There are many approaches to moving your business toward its future – all generally bundled under the term “succession planning.” To start this adventure, you have four choices to consider: transfer your company to your family’s next generation, to be “acquired” by selling to another business concern, to sell the business to your employees, or to hold on to the company until your last breath. Select your path below.

Begin Your Adventure…
If you choose to keep it in the family, skip to “A” below
If you choose to sell to another company, skip to “B” below
If you choose to sell to your employees, skip to “C” below
If you choose to die on the job, skip to “D” below

A
Keeping the business in the family requires one key thing: family, likely of the next generation, that is willing and able to step into the role. And, while it is common for that next generation to exist, it’s the "willing and able" part that can get tricky. Within families, some children are raised in the business with the expectation that they will take the helm; some forge their own path and leave the family business behind; some return after a period of exile or self-discovery. Even though the transfer will be between family members, time and attention are essential for transferring the business faithfully, correctly, and legally. Skip to “E” below…

B
For many companies in the industry, acquiring other companies to access customers, market share, technology, or capacity is a common growth strategy. Interest in companies to acquire has, of late, been high, as big companies look to get bigger and companies in other print segments look to diversify. Buyers in this space – which can include private equity firms – are looking for currently-successful businesses that offer great value, clean books, no legal trouble, and an up-to-date equipment portfolio. While being acquired may be a common succession path, it can be bittersweet. Post-sale, the entity you built may no longer exist and your leadership may no longer be needed. Skip to “E” below…

C
Another option for business succession is to sell part or all of it to the company’s employees through a full or partial ESOP (employee stock ownership plan). The motivations for this type of purchase are often two-fold. First, some business owners want to reward the very people who helped them grow their business and succeed. Second, the proceeds from the sale can be used to provide an income to the outgoing owner, as the employees will purchase the business over an extended term. Key consideration: the employees should be willing buyers and will want to purchase a business that has been managed well and is operating successfully. Skip to “E” below…

D
While there is something noble, even heroic, about owning your company until your last dying breath, that approach is likely the worst for its future. In truth, it’s like passing away without a will, and it will be the beginning of dark times for those (be they management, family, creditors, or lawyers) who will have to make sense of what’s been left behind and do their best to forge a future. In truth, however, the business will no longer be your concern. And, while you will never get to enjoy the peaceful vibe at Succession Acres, colleagues and family can still visit you at Eternal Meadows, just down the road. Skip to “F” below…

Your Adventure Continues…

E
Congratulations! You’ve made the decision to sell your business in a thoughtful way. And whether you chose to pass the company to family, to your employees, or to another business, the next step is the same. One of the best ways to maximize the sale of your business is to hire a team to help you see it through. Many companies will retain the services of a business broker to help them connect with a wide range of interested buyers. Other team members commonly include personal financial planners, accountants, and attorneys. At this point, take time to fully understand your business, carefully considering how it might look to potential buyers. Do your part to make the sale go smoothly!

As the seller of your business, you will have a choice (or it will be forced upon you) of whether or not to continue to be involved.

Some will choose to finalize the sale of their company and leave for good, opting instead for the grassy idyll of Succession Acres. Skip to “Epilogue” below…

Others may opt to stay involved, either for the short or long term, still committed to the success of the business, but no longer the person ultimately responsible. Some may opt for a second career, or even start another business, not ready to stop working. Skip to “H” below…

F
You open your eyes and find yourself in a vast, featureless space. A voice, seeming to emanate not from around you, but from inside your mind, asks, “Do you have any regrets?” With your simple nod “yes,” the lights fade. You hear a gentle whooshing sound, and you find yourself back at your desk – younger, wiser, and at the very moment you first thought, “I should really do something to ensure the future of my business.” You have (hopefully) realized the error of your ways. Return to “Begin Your Adventure” above…

The Final Decision…

H
So, what will you do next? If the company still wants and needs you around, it may be in a position that allows you to advise and to think more strategically about were the business is going, still cashing in on the relationships and experience you possess. Or, you may choose to consult, or to open a new business either inside or outside of the industry. You may even downshift – greeting people at a big-box store or taking an hourly wage to “shush” people at your local library. The decision of when to fully retire is yours! When you’re finally ready to take that step: skip to Epilogue below…

Epilogue…

Welcome to Succession Acres, where the birds chirp more sweetly and a shuffleboard court is always open. You’ve made it! And during your time here – however long you stay – you will sleep well knowing your business is on its best path forward. Will you recognize your business in ten years’ time? Will they recognize you? Who knows! In the end, it may not really matter, because you have a bucket list to work on!

Enjoy another exciting adventure by reading Choose Your Business Adventure, Volume 1: “Escape to Profitability Island.”