Moving on – the “dos and don’ts” of exiting

Owner-managers are often the biggest barrier to the growth and success of their own business. Few businesses achieve a successful transition from owner dependency to management team dependency.

The solution is threefold.

  1. Start with the end in mind
    • Businesses that are wholly dependent on the activities and performance of their owners are unlikely to attract a significant capital value on a sale.
    • Most businesses are owner dependent at the outset. The skill lies in reducing this dependency over time.
    • At the point of sale, the business should be able to run without the involvement of the owner, except where the owner is performing a line management role that can be filled through normal recruitment or search.
  2. What you should do
    • Take charge of the strategy of the business and focus on the big issues. Spend a minimum of 50% of your time thinking about the future of your business, i.e. working “on” not “in” the business.
    • Hire the best people you can afford to employ.
    • Let go of routine management tasks.
    • Give your managers the tools and authority to do the job.
    • Motivate and encourage your management team.
    • Develop the team’s skills, knowledge and understanding.
    • Make independence of management clear to all your stakeholders.
    • Maintain a sensible work/life balance.

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