Creating a transferable business (Part 3): when you exit, who will do your job?

• Author: Bannon, Mel B.
• Position: CONSULTANT'S CORNER

Reducing the dependence that your business has on your individual efforts will allow you to identify and develop others who can run the business, as well as create a more valuable, more transferable business, increasing the pool of potential purchasers.

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As the owner of a privately-held business, you are likely a catalyst for the ongoing running and growth of the business. The roles that most owners fill in their companies often span a number of different areas within the business. Even with an established management team, owners are often still the "straw that stirs the drink" on a daily basis. Without the stirring where would your business be? And, as you consider your exit from your business, you need to answer two questions on this topic. First, "How dependent is my company on me?" and next, "Who will do my job when I leave?"

What Is Your Job at Your Company?

In your business are you the sales person or are you the head of operations? Or are you both? Do you innovate within your processes and/or product line? Do you limit yourself to watching over the finances on a regular basis? Or do you do some of both? Are you the leader amongst the staff or are you the owner who stays in their office in order to empower others to do their jobs without micro-managing them? Overall, how much of your company is dependent upon you and who will fill those roles after you exit from the company? Again, these are critical questions to answer if you want to have a smooth transition of the business and achieve the highest value with the fewest continued obligations from you during a "neat and orderly transition" later.

Are You a Bottleneck for Your Business and Your Exit?

An important question to ask about the job(s) that you perform at your company is whether or not you actually slow down the growth of your business. In other words, are you a bottleneck to your company?

You likely are a bottleneck to your company and your successful exit if any/all of the following apply to you:

* You are critically involved with decisions on a daily basis, to the point where projects or steps in a procedure cannot advance without you.

* You are the only person who holds key vendor and customer relationships and the only person who takes those phone calls and/or meetings.

* Planning and services or product design and innovation, comes only from you.

* You are the only person who knows the company's financial position and has bank relationships to fund the...