Building a successful business from the ground up is an incredible feat, and as a business owner, you’ve poured your heart and soul into your company.
But as the old saying goes, all good things must eventually come to an end.
Whether you’re looking to retire, pursue a new venture, or pass the torch to someone else, it’s important to consider the various aspects of exiting your business.
Are you financially prepared?
Have you addressed any technical and operational challenges that may arise?
And most importantly, are you emotionally ready to let go?
In this episode, our guest John Ovrom, and I discuss why being emotionally prepared might be the most important component of exiting your business. He also shares helpful suggestions for managing this change.
Timestamps for this week’s episode
- 04:49 At what point in the process of exiting a business, either for yourself or for clients, do you feel that the change will be major? Is it before signing the agreement, during the process, or after the agreement has been completed and the payment has been made?
- 09:50 What other business exit strategies can business owners consider aside from selling the company or their job?
- 12:23 How can business owners effectively transition from being the central figure to empowering employees to take ownership and lead the business through its different stages of growth?
- 22:16 What actionable steps can owners take to reassure employees during the exit process and provide effective change management support to ensure a successful transition?
- 36:25 What is the next actionable step that business owners can take in the next week or two if they are thinking of exiting their business? We’ve talked about the emotional side and preparing for the transition, but what practical steps can they take to move closer to their goal of exiting?
“Selling your business is much more than the transaction. It’s like losing your identity or what makes you relevant.” – John Ovrom
At what point in the process of exiting a business, either for yourself or for clients, do you feel that the change will be major? Is it before signing the agreement, during the process, or after the agreement has been completed and the payment has been made?
The change can be major at different points – depending on the reason for the exit.
If the exit is due to a cause, such as illness or death, the ability to walk away may be easier than if it is out of convenience, such as reaching retirement age.
Emotions can be a roller coaster, and there may be a desire to leave, followed by nerves and excitement when putting the business on the market. Price, terms, taxes, and future plans must be considered, and lawyers and CPAs may be involved.
Finally, the signing of the agreement triggers the realization that life is about to change.
In summary, the point at which the change will be major in the process of exiting a business depends on the individual circumstances and emotions involved.
Business owners can consider other business exit strategies beyond selling the company or selling their jobs.
Selling the business is not the only exit strategy available for business owners.
Other methods include:
- Selling your company but staying on as an employee
- Selling to key employees
- Giving it to family members
- Quit your job and hire a CEO
- Decide to stay on until you pass
- and more
“My biggest piece of advice: Find a hobby outside of your business. Don’t let business be all of your friends, all of your hobbies, all of your social events. Because if that’s all you know, you’re never going to walk away.” – John Ovrom
How can business owners effectively transition from being the central figure to empowering employees to take ownership and lead the business through its different stages of growth?
Empower your employees to take ownership and lead the business through its different stages of growth.
Just like kids need other people besides their parents, your employees need other leaders besides you, the business owner.
Visualize your business as a child with its own identity and support its growth and passions.
Don’t make it about you; make it about the business and build it into an exit strategy.
What steps can owners take to alleviate employee concerns, and how can they provide effective change management support during the exit process to ensure a successful transition?
- The longer you give employees to process and be okay with change, the better.
- Communication is key – be authentic with who you are and communicate your intentions clearly.
- Put the business first and set it up for success.
- Understand that change is inevitable and some employees may not like the new management.
- Give employees the opportunity to succeed and grow.
- Make it clear that you want the company to be healthy and that you want employees to be part of it.
- Understand that there is a difference between business owners looking out for themselves and building a future for the company.
Define your “win” or goal for exiting, such as a certain amount of retirement funds or a specific age.
This will help you build a path toward your goal and make practical plans for the transition.
It’s important to have a clear understanding of why you want to exit and what you’ll do next to stay relevant after leaving the business.
- The point when one realizes that this will be a major change when exiting a business depends on individual circumstances. If the exit is due to a cause, it may be easier to walk away, than if it is out of convenience.
- Aside from selling their business, owners have other exit strategies to choose from, such as selling the company but staying on as an employee, selling to key employees, giving it to family members, hiring a CEO, or staying on until passing.
- Empower your employees to take ownership and lead the business through its different stages of growth by finding their passions and supporting them. Don’t make it about you; make it about the business.
- Open and honest communication along with hiring the right people to lead the company forward is crucial for a successful transition.
- Define your exit goals, such as a specific triggering event or financial target to build a clear path and plan for the transition.
About guest – John Ovrom
President, Founder, and Author
Exit Consulting Group
John Ovrom is the President and founder of Exit Consulting Group, which provides consulting and brokerage services for business owners to prepare for and execute their exit. He’s also the author of “Exit & Answers: Navigate Your Business, Exit Like An Expert”
He is a specialist in creating roadmaps for business owners anticipating a transition, whether it’s transferring the business to family or employees or selling to a third party.
Facebook – https://www.facebook.com/ExitConsultingG/
Website – https://exitconsultinggroup.com/
About host – Kathy Svetina
Kathy Svetina is a Fractional CFO for growing women-owned businesses with $1M-$10M in annual revenue.
Clients hire her when they’re unsure about what’s going on in their finances, are stressed out by making financial decisions, or need to structure their finances to keep up with their growth.
She solves their nagging money mysteries and builds a financial structure with a tailored financial strategy. That way they can grow in a financially healthy and sustainable way.
Kathy is based in Chicago, IL and works with clients all over the US.