In this short video, I explore the business exit plan succession planning – the tricky job of finding or developing a replacement for yourself so that you can exit your business and leave it in a good state. Key factors to getting the most for your business on exit.
It follows on from a previous post called 5 Factors To Increase Your Business Exit Value
Recap: The Business Exit Plan Model
[00:00:19] OK so the model, if you recall for maximizing your business exit value from your business, was to make sure that you’ve got your assets, your business performance, the people, and your future potential all taken care of. Bearing in mind there will be a maximum value your business can never raise based on the sector within which you’re operating.
Chaos! The Default Business Exit Plan Succession Approach…
[00:00:45] In this particular video, though, as I said I’m going to talk about the people.
All too often, when a business owner decides that they want to exit and sell, they start to appoint people into positions that are simply beyond them.
And so what happens is the business just fails to operate.
They owner gets really frustrated, starts moving people, rearranging, reorganizing, and frankly upsetting everybody in the business as they thrash around trying to figure out how to make it work so they can escape and go off to the wonderful land of retirement.
How To Replace Yourself
And all you have to do is kind of slow down a little bit and think this through because fundamentally it’s not that difficult to figure this out.
If you imagine each person has a certain level of capability at any moment in time, they’ve also got a level of potential within them. So if someone’s got potential to grow up to your level that’s fantastic.
But how quickly can they grow there?
What experience, what training and what coaching from yourself, or perhaps outside, are they going to need to be able to step up in order to fill your boots?
And are there some steps between thay they need to take? Do they have to fill some other jobs, some other roles first before they can really take on that big job that you want them to do?
People Development Is Not Just For Exit Planning…
And by the way this doesn’t just go for planning for an exit from your business, it also goes for every time you think about appointing somebody new in your business.
You’ve got to think in terms of their ultimate potential but also their capability now and what the gap really consists of.
Think Hard Skills and Soft Skills
And you can think in terms of interpersonal skills, you can think in terms of soft skills if you like, and you think in terms of real technical skills or job skills or hard skills. So we’ve got soft skills, hard skills and they’re the two sides of the equation when we’re thinking about planning the development of someone.
[00:03:05] So I hope this has been useful to you. And if you’ve got any questions or thoughts on developing your people for the future and building your business exit plan succession and development, just put a comment below and we’ll get into a bit of a discussion about it.