One of the tools we use to help business owners organize their transitions out of their companies and onto their Next Adventures™ is The Big 6™. An owner’s answers to these six questions create a compass that guides them as they progress in their transition journeys. We’ve written about these questions and how they relate to owners. Today we turn the tables and share our answers to The Big 6 succession planning questions.
The Big 6™
As a quick reminder, here are the six questions every owner must answer as they chart a path to their business transition.
Why: Why are you driven to transition your business to successors?
What: What will you sell or transfer: the entire company or parts of it?
Who: Who will succeed you in leadership: a partner, key employee, family member or third party?
When: When will you begin the transition of your company and when do want to complete it?
How Much: How much money do you want for your equity, to live your Next Adventure, and how much can your company afford to pay you?
How: How will you transfer ownership: via a sale, gift, or some combination?
We recommend that owners begin with their Why and proceed through the questions in this order. When owners begin—as so many do—with How Much and How, they typically become stuck and lose sight of the goals they want to accomplish.
Now, it’s our turn.
Our Answers to The Big 6™ Succession Planning Questions
Why: Why do we help owners create succession plans? We know that successful business transitions make an enormously positive difference in the lives of owners, successors, employees, their families and ultimately communities. When transitions fail, everyone involved suffers. Our work matters.
What: What do we bring to our work? First, we’ve honed our skills from long experience working with owners in a wide variety of industries. Second, our guiding principle is relationships first. When owners prioritize the relationships with the important people in their lives, they have a litmus test for all the options they will consider as they make decisions throughout their transition journeys.
Who: Who are we? The Transition Strategists is a group of Guides and project managers devoted to achieving one goal: Adding owners to our group of 100 percenters. 100% of the owners who have used our tools and processes have 1) left their companies in the hands of successors prepared to lead, 2) positioned their companies for ongoing success and 3) are living meaningful post-business lives.
When: We have helped owners plan their transitions whether their runways are as short as one or two years or as long as 10+ years before they begin their Next Adventures. While there is no “right” time to begin succession planning, owners who give themselves more time to plan have more options and greater odds of success.
How Much: We work with companies with recurring annual revenue ranging from $2M to $10M+. These companies have positive cash flow beyond owner compensation and typically have fewer than five owners. Our fees are directly related to the complexity of the transition, e.g., the number of companies and people involved.
How: We use a planning process and tools that work for companies in any industry, of any size and entity type, and regardless of form of ownership. Our process is designed to help owners 1) understand what they have and what they want, and 2) chart a path to achieve transitions that position their companies be as—or more—successful under new ownership as they are under current ownership. We work with owners who can’t yet envision how a transition can meet their goals and keep their most important relationships intact. As we work together, we create Transition Roadmaps that help owners confidently execute the transition of their companies to successors.
These six questions are the points on The Transition Strategists’ compass. They have guided our steps for the past 30 years and we look forward to seeing where they’ll take us in the next 30.