Succession planning – who can take over your business?
“We’re just going to turn the lights out and lock the door behind us”
That’s what one business owner told us recently when we asked him about his future plans for his company.
He was under the impression that there was no intrinsic value in his business once he and his fellow working shareholders left. And with no clear succession plan in place, that meant, in his words, “game over”.
It is a big dilemma, for every business owner. If you leave, who takes over?
Perhaps the current senior staff or management aren’t quite ready to take the reins – the step up is too big. In a family business, perhaps the obvious candidates are not keen to assume control, or lack direct experience, or have forged careers elsewhere. Where do you turn?
The answer is, of course, assessing your options - and those will be unique to you. Alongside our traditional strength in locating the right trade acquirer for our clients, BCMS is negotiating an increasing number of Management Buy Outs, and Management Buy-Ins – where senior professionals buy into to a company with potential for growth.
We are also involved in sales to private equity, and sales to high net worth investors. Our clients have also undertaken a part-equity sale, where the owner sells a stake in his or her business.
My point is this: you have multiple choices.
The first thing to remember is that unless you are the only person working in it, your business does not start and end with you. Your customers, your IP, your contracts, your staff expertise, your brand, your reputation – all these things have a value to an acquirer.
Don’t underestimate the value, or appeal, of the business you have built. And definitely don’t switch the lights off on your way out.