Planning Business Succession and (hopefully) Retirement
Great article here about, among other things, Francesca’s restaurant in Chicago and its growth from one location into nineteen. Stories like this are great, but they always make me think about the business owner’s self-made problem…let me try to explain.
You spend 20 years growing your business. It works. You grow, you’re profitable, people want to be associated with you and your brand is known and respected in the market. Now what? Problem here is, if you get burned out, you don’t have too many options. It’s not like having a mid-life (or quarter-life) crisis and giving it all up to backpack the Alps is in the cards because more than likely if you leave, the business dies.
What to do? Well, there are two options. First, selling the business outright. Second, business succession planning which may include a sale. What’s the difference? Basically, the first option is geared toward a quick strike…but as we know from years of watching ER, it’s not always good to pull the knife out of the patient. If the owner sells and leaves quickly, the business may die.
In cases like this…where the owner’s charisma and presence make the business what it is and contribute significantly to its ongoing success…the answer is clear: business succession planning. Key questions here:
-Who has the technical ability to take over?
-Who has the charisma to develop and market the business?
-How should these folks be paid?
-What role will the owner take on as he/she transitions out of the business?
-How can the goodwill of the business remain intact through the transition?
These are key questions, and once answered must be thought of in a larger context of being tax-wise and business savvy.
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