Successful business owners are typically visionaries. They have the ability to look ahead, anticipate both threats and opportunities and take action accordingly. Just as typically, the eventuality they will one day leave their companies can be a blind spot. Even owners who recognize they will put their companies in the hands of successors “someday” often don’t know how to approach the topic with others without making everyone uncomfortable — or worse.
If you are one of these owners, here are six tips we share when we coach owners through introducing the topic of succession and creating succession strategies designed to make their business departures personally meaningful and financially rewarding.
Tip 1: Don’t underestimate the importance of a first impression.
The tone you set when you first mention the topic of your eventual departure is indelible. When you approach the topic with generosity and confidence, you immediately temper, rather than feed, the concerns of others. Generosity in this context means recognizing that a successful transition is a team sport. Success does not depend on you alone, but on your successor, management team and employees, at a minimum. Owners who approach the topic with confidence don’t know all the answers — the how, when and who elements of a transition — but they have thought about their transition goals and time frame options before raising the issue.
Tip 2: Use positivity to manage emotional reactions.
You cannot control the fact that everyone around you will react to whatever you say about your eventual departure from your business. You can, however, influence how strongly people react. Imagine the reaction to: “I’ve been thinking about the fact that if I don’t begin to turn over some of the responsibility for running our company to others, the success of this company is at risk. I want what we’ve created to continue for everyone working here, for our customers and really, for our community.”
Tip 3: Create a hierarchy.
Once you’ve taken some time to think about what you want your transition to accomplish, we recommend you speak to an advisor, specifically a transition advisor. (Full disclosure: My company offers these services, as do many others.) Find someone who has experience with the full arc of business transition strategies and can guide you through organizing your many questions in anticipation of the questions of others. You may then want to discuss your thoughts with your spouse to make sure the two of you are on the same page. Only then would you approach a potential successor and/or your management team. There is no one-size-fits-all approach because your transition will be as unique as you, your business and your situation are.
Tip 4: Consider what’s in it for them.
It’s natural to react to a potentially life-changing announcement with some form of “What’s in it for me?” As you speak to others about your eventual business exit, consider the news from their perspective. Business succession isn’t just about your dream. Key employees, business partners and/or children will also have dreams that involve the business, and your successor must have a dream for the business or they are the wrong successor!
Tip 5: Be open.
As insightful and considerate of others as you are, you cannot anticipate every person’s perspective about your business transition. Every person will bring their own fears, attitudes and expectations to the topic and their role in it. Be open to the opinions of others and prepare yourself to listen rather than fix. Listening comes first. Fixing comes later.
Tip 6: Give yourself the gift of time.
Please don’t put off planning for the “someday” transition of your business because you aren’t sure how to talk to others about it. Give yourself time to prepare for conversations about business succession. The same is true of your departure: The more time you give yourself to plan it, the more options you’ll have and the better your chances for success.
Yes, transitions are complex, but only successful business owners are privileged to lead them. When you put your business in the hands of a successor who is prepared to lead, you not only create a great next adventure for yourself, but you leave a wonderful legacy for your successor, your family, your employees and your community.
This article originally appeared on The Denver Business Journal website.
Elizabeth Ledoux is a co-author of the award-winning It’s A Journey: The MUST-HAVE Roadmap to Successful Succession Planning, as well as Accelerate Your Entrepreneurial Flight and Understanding the Growth of the Entrepreneur. She frequently speaks to organizations and business owners about challenges and opportunities in private and family business transitions, business and individual growth, and the business succession journey.