Procrastination: It’s a behavior that everyone agrees is rarely productive and yet, in some areas of our lives, we’re all guilty of it. When we procrastinate about taking out the trash or making dinner, the consequences are minimal and generally short lived. The price of procrastination in business transitions, however, is high and very often long lasting, if not life changing.*
The length of your runway
As transition strategists, we’re evangelists for long runways. What we mean is that the more time owners give themselves to plan their business transitions, the more options they have and the greater the odds of completing a transition successfully. Putting off transition planning has the opposite effect: fewer options and therefore greater likelihood of a transition that fails to meet an owner’s financial and personal goals.
When it comes to business transitions, we know that one of the most difficult steps for owners is getting started. Once owners begin the transition journey with a destination in mind, however, they gain confidence and the momentum necessary to reach their goals. What makes getting started so difficult? Here are two of the most common reasons owners tell us that it’s not the right time to plan for the day they will put their companies in the hands of successors. (These are examples of the price of procrastination in business transactions.)
Reason 1: My business isn’t worth enough to fund the post-business life I want.
Many owners begin planning their transitions long (i.e., five to 10 years) before they intend to leave and value building is an important part of their transition strategy. Rather than set a specific date for the day they’ll begin their Next Adventure™, their “When” may be a dollar amount of net profit or sales for one or multiple years.
Reason 2: I don’t have a successor.
My first response to this statement is “Tell me a little more” and my second is “How do you know?” I remember talking with a gentleman who told me that he wanted out—immediately—but didn’t have a successor. He didn’t want to sell to an outside third party after dedicating his career to building a stellar company reputation and supporting his community. He explained that his kids weren’t interested or involved in the business and the nephew who was involved (as the company’s top salesperson) didn’t seem to want to take over. When I asked, “How do you know?” he told me he could just tell.
This owner said he never used the phrase “take over the business” much less “your future” when talking with his nephew and admitted that the two had never had a “real conversation” about the future of the company.
The Price of Procrastination in Business Transitions
It takes time for owners to decide what they really want from the transition of their businesses. It takes time to identify potential successors, prepare for conversations with them and train them. It takes time for successors to learn and time to adjust to unexpected events. Putting off planning for the day you’ll begin your Next Adventure limits your options and reduces the odds of a successful transition. Ultimately, limited options and odds is the price of procrastination in business transitions.
Give the gift only you can give yourself: time. Let’s talk about how to take the first step on your transition journey.
*In Elizabeth Ledoux’s book, It’s A Journey, she describes how Planned Procrastination can keep owners and successors from taking on too much during a transition and becoming overwhelmed. Embedded into our Transition Roadmap Developer Process™ is setting milestones and breaking each into its component steps. Meaning, we focus on one milestone, such as transferring all financial responsibilities, then organize the steps necessary (e.g., accounts payable, accounts receivable, payroll, financial statements, etc.) to reach the milestone. We set aside (through planned procrastination) transitioning CEO tasks until the transition of financial responsibilities is complete.