Create an Optimally Sized Business Instead of Fretting About Succession

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If you are the majority owner of a business and feel yourself shutting down when the subject of succession comes up, consider the following layers:

  1. YOU – Reflect first on the results of appointments you (and your significant other) have had with your personal financial planner, physicians, estate attorney, and accountant.  When will you want to retire or reduce your workload? What is your life expectancy? What income will you need? Where will you want to live? Will you have caretaker responsibilities and expenses? Do you have long term care insurance? How much could your other income sources produce? How much do you need, want, deserve from the business? (These may well be 3 entirely different numbers.)
  2. THE BUSINESS – Reflect second on the future of the business. In many ways a company is a living breathing entity. Think about the economy, the customer base, product life cycle, momentum, etc. What will the company need to be resilient? Profitable? Significant? (These too may be 3 entirely different answers/numbers).
  3. PEOPLE – Reflect third on key individuals who drive the resilience, profitability, and significance of the business. What reward have they earned? What return have they been promised? What help will they need as you step back and some money is paid to you?
  4. THE COMBINATION – What would  the optimum size of the business be to:
    • pay you what you deserve
    • ensure that the business is resilient, profitable, and significant
    • provide key people what they have earned and been promised
    • have leadership and skill sets in place to handle transition
  5. HOW – What strategies would achieve optimal size, resilience, profitability, significance, and fulfillment of obligations to key people (including you)? Maybe you should consider acquiring a complementary company? Maybe you should consider merging with a competitor?  Will the company need to hire a President? Would an ESOP retain key employees? Perhaps improved marketing would be sufficient.

This sequence may seem obvious, but it is NOT what most people do.

Many business owners end up with a scramble of facts and emotions about themselves and other people.  Loyalty. Fear of the future. Legacy.  Entitlement.  Guilt.  Disappointment.

Especially during uncertain economies (NOW), many owners approach succession – related analysis from a pessimistic almost cynical viewpoint. I have seen owners work themselves up into horrible resentments based on arguments they have had with themselves in their own minds.  Without assistance, they never reach question # 4…let alone question # 5.

The optimally sized business meets its obligations to the owners, its key stakeholders, and its future. When there are honest answers to questions 1-3 , the optimal size becomes self evident and can guide strategic decision making focused on the market place, product differentiation, productivity, etc. with far fewer negative assumptions, resentments, and fear.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her current service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.  Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.             

About Aldonna Ambler:
Known as The Growth Strategist®, Aldonna Ambler built and grew a suite of companies to help midsized B2B companies achieve accelerated growth with sustained profitability® A Certified Speaking Professional (CSP), Ambler has addressed over 2000 audiences and hosted a syndicated online talk show about growth strategies for 9 years. As a growth financing intermediary, Ambler raised over $1 Bil dollars for midsized companies. The winner of over 2 dozen prestigious national and statewide "entrepreneur of the year" awards, Ambler is available to speak about “profitable growth during any economy” and/or serve on the board of a growth-oriented privately-held company.

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If you're interested in growing, what you have in Ambler is someone who specializes in "Growth" not a general business consultant or coach.

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