What Comes Next Depends on What Needs to Happen Before
Rochester wealth advisor Nick Norvell urges owners to ask what comes next; our answer is that it also depends on the work that has to happen before the exit.
Prompted by “Succession planning questions for Rochester small business owners”, Rochester Business Journal (Nick Norvell).
Rochester wealth advisor Nick Norvell, in a piece in the Rochester Business Journal, is urging local owners to ask one question, whether retirement is two years away or twenty: what comes next?
It's the right question. Our answer is that it also depends on the success of what needs to happen before.
Maximizing your options is about acting today, well in advance of the exit, while it is still possible to achieve them. It starts with knowing what they are: sell to an outside buyer, pass the business to family, develop an internal successor, or close.
Then comes a robust business plan that gets you to the one you want. Waiting and hoping for a buyout isn't a strategy. The heavy lifting for an exit happens in today's business plan, which has to let the company succeed with or without its present leader — a definite requirement for exit.
Could the company run without you for a month?
That means building a strong tier of leaders who can run and manage it. Strong, growing businesses with leadership teams ready to take the reins have far more options when the time comes. Owners who miss that sometimes face unpalatable ones. For an owner-operator it's harder still, because the business runs through you.
Your financial advisor, CPA, attorney and banker each bring something essential. A CEO peer advisory board adds what they usually can't: seasoned CEOs in your position who give you the unvarnished truth about your strengths and weaknesses, with no skin in the final decision. These CEOs have walked the same path as you have.
Test it out: this week, write down the exit options you would actually consider, then the three people who could run the business without you for a month. Any gap on that list is your business plan for next year.
In addition to the conversations you have with your financial advisors, these equally important succession questions are always high on the list of best-practice topics we discuss in OCTET CEO peer advisory groups.
Looking for a place to discuss issues like this with other local business leaders? Join one of our no-cost Rochester CEO insight sessions and test your ideas with your peers.
Originally posted on LinkedIn ↗