“ I’ll look at the long term but I may not get there!”
“Rubbish”, I said, “Why do you say that?”
“Well, I’m 69 and very fit but you never know what might happen”.
I was a trifle surprised as he didn’t look it but it raised a great raft of questions. So many owner managers just plough on, running their businesses with very little thought about the future and how they are going to release the asset in the business which they have built up over the years.
He was reluctant to get into a detailed discussion at first, but eventually he decided to look at the options open to him.
The business was well run (mostly by him, let it be said), growing and profitable but he was, as many owner managers are, something of a control freak. He needed to know exactly what was going on and he had his little coterie of spies around the company to tell him.
In fact, although he had what could laughably be called a Board, he didn’t have a real management structure. What he had was a group of gophers who did his every demand. It seemed that there was no-one whom he would rate as potential succession.
In any case, after years of ruling the roost, he would have found it exceptionally difficult to let go and allow people to get on with running the business.
So what are the options for an exit route? For example he could prepare the business for a trade sale, see if an MBO is a feasible option, stay on and run it but accept that succession is essential, and so on.
The real answer here is, of course, to prepare long before it becomes critical. This would allow the leader to bring in and test potential succession, to build a management team which would encourage potential buyers of the business and to start the process of looking at all the options in a non-pressurised environment.
A salutary tale. I was asked to discuss with a lady how the business which her recently deceased husband had built, could be run effectively without her input. For the time being accountants were running it and they resolutely blocked any ideas I had for the continuation of the company. Eventually they liquidated it and several people lost their livelihoods
A sad story – make sure that it doesn’t happen to you.