According to BizBuySell.com, more than 7,800 small businesses were sold in 2016. That’s up by nearly 9 percent from 2015. Good news, right? Unfortunately for many, it isn’t always as smooth as walking off with a big check. Many business owners will sell, but there will be contingencies for future earnings, requiring owners to continue working for up to five years to earn the full sales price. Why? Because they haven’t been able to implement a good succession plan with a successor prepared to lead the company forward.
Several years ago, I was working with a small, rapidly growing professional services company where the owner was nearing 60. He decided to develop and implement a succession plan, which would allow him to spend more time with his family. So he turned to his high performing vice-president of sales and promoted him to company president.
Following the promotion, I was selected to help the new president with his leadership transition. And, what I quickly learned was that there were two things that impeded the success of the president — which only the Founder could resolve. The founder needed to redefine and shift his close relationships within the company, and he needed to step aside for the new leader to truly operate as president.
In this situation, there was a long and very close relationship between the founder and controller….