As a business owner, you possess a strong, refined skillset that provides immeasurable value to your business. When the time comes to transition out of your business, it’s not as simple as just finding someone else to lead the team; you need to figure out what knowledge and skills will be walking out the door with you and how they will be replaced. With careful planning and awareness of both your skills and the resources around you, you are able to make changes in the short-term to ensure that your eventual exit won’t impact the wellbeing of the company. Planning now to minimize the possible gaps in skillsets when you walk out the door will make things more efficient in the near future, and pay off in the long run.
Owner-operated businesses typically have one thing in common: an owner that is too important to the business. Because of this, an owner can’t expect to withdraw from the business without causing a ripple effect throughout the organization. Think of the business as a sort of totem pole: the top is the ownership, the middle section is the management team, and the bottom is the employee base. When the owner is ready to exit the business, their skillset and responsibilities will have to be replaced. With internal transitions, it’s likely that someone from the middle section will step up to the top – which is great and fills the need there. But what owners often forget in the planning process is that every time someone moves up, they are leaving a gap in the position behind them. The problem, of course, is that all of these gaps must be bridged, whether by internal transitions (which will only create more gaps), re-delegating work, or recruiting externally. The success of a transition relies on filling all of the gaps, not just the one at the top.
This process of minimizing the gaps doesn’t need to – and more importantly, shouldn’t – happen only when you’re ready to exit the business. There are key steps and practices you can implement today to ensure that any gaps created during the transition will be minimal, and can be handled quickly and effectively.
1. Plan Early
You can’t expect to be able to walk out the door tomorrow, taking with you any specialized skills and knowledge, and expect the business to continue operating in the same capacity that it does today. As a business owner, you have invested countless hours of time and energy into running a successful business, and you will want it to continue to thrive after your departure. Planning early allows you the time to figure out where the gaps are, what you can do to make them smaller, and actually implement the changes now to ensure a successful transition in the future.
2. Be Self-Aware
In order to figure out what the company will be missing when you leave, you need to do some careful self-reflection and figure out what skills and knowledge you bring to the table that couldn’t exist without you. This likely won’t be everything that you do; there will be functions that you currently perform that are supported by a member of your team and could be easily transferred with little interruption to normal workflow. However, there will be key skills that you possess that can’t be handed off and expected that it will be business as usual. The starting point to being able to identify where the gaps will be is the ability to conduct a thorough self-assessment and identify what the skills are that you will be leaving with. Once you’ve established this, you can begin to figure out how to replace them.
A key component of self-awareness is figuring out whether the business can function without you. Too often, owners are heavily involved in so many key components of the business that it wouldn’t be able to run at its current capacity without him/her. The day-to-day business processes need to be able to run on their own; if you’re too important to the company, it will fail without you.
3. Know Your Resources
Next, you need to know and understand what skills and talents you have around you. Having a thorough understanding of the skillsets of your employees and, more importantly, their potential for improvement, is imperative. Everyone who works below you—executives, management, and employees—is part of your bench strength. If there’s something that you can’t do, you should know who you can put in the game to get it done. The same applies to when you’re planning to exit your business: you need to be able to identify the gap between what you do and what the people below you do and who, if anyone, can step up to the plate. Once you know how big the gap is, you can determine how to make it smaller, whether it’s by reshuffling your internal resources, providing training to build up your employee base, or external recruitment.
4. Improve Today to Benefit Tomorrow
Good news: there’s a way you can minimize the gaps even before you’re even planning to exit the business. By improving the people below you, and building up skillsets through training and development, you will eliminate the big gaps. Building up the bench strength beneath you also makes it easier to push yourself to the periphery when you’re ready to start transitioning out of the business. And, if your ideal outcome is selling the business, you’re also making your business more attractive to potential buyers by developing a stronger employee base and processes that can run themselves without your direct involvement.
Every company will deal with some kind of gap in the transition planning process. With proper planning, the gaps can be pretty small from the beginning, which make them much more manageable to address when the time comes. Even if difficult circumstances leave you with a big gap, it can be bridged—but you need to know where it is and what it is before you can put a plan in motion to minimize it. Five to ten years before your intended exit, the future of the company is still in your hands – so why not leave it in a position to continue to succeed?
Take control of your future. You’ve earned it.