How To Successfully Transition Your Business
How To Successfully Transition Your Business
Over the last few weeks, our team at BlackSmith Growth Partners has helped several small businesses prepare for either growth or an exit. I want to dive into the 5Ps this week so you can use the same framework we are using to help other baby boomer, retiring, founders AND family businesses decide between:
Do I grow My Business or Do I Sale My Business?
The surprising stats say that only 30% of business owners will be able to exit, so we need PLAN B, like yesterday.
In Today's Blog:
- • Wins/Lessons/Thoughts from the week
- • How To Successfully Transition Your Business
- • Weekly Take-Away: 👉 Is there a pace to business growth? 👈
Weekly Wins/Lessons/Thoughts From the Week:
- • Throughout my entrepreneurial journey, I’ve weaved between extreme focus and lost in the woods. My biggest lesson is to find the 1-2 objectives you want to reach over the next 30-60-90 days and exercise extreme focus.
- • This past week was a weird one with many different countries celebrating holidays throughout the week… Turned out to be a crazy good week for business growth.
- • Lastly, I can’t reinforce enough the power of relationships and connections… The right people (or person) can change our trajectory in a second… but, so can the wrong people so interview, vet, and get others’ opinions to help make the right people’s decisions.
How To Successfully Transition Your Business
First, why even talk about this?
Well, the stats say that 10,000 baby boomers are retiring every day and 8-10% are business owners 🧐. Combine this with only 30% will exit and we've got us a good ole problemo.
So, as a business owner is nearing the later stages of their career (or one of the 5Ds hits - death, divorce, disease, disability, or disagreements), planning for a successful transition for your company can be both an exciting and challenging process.
You need a plan and an approach. Here is ours.
We're working with clients to help them implement a five (5) key pillars approach:
People Purpose Processes Partnerships Profit
Let's dive into each of these crucial elements and how they can guide you through this important phase.
1. People: Building a Strong Team
Most problems in business can be categorized into people, time, or money. This is why I'm starting with PEOPLE. The transition process beings with people, but people are messy. People have feelings. People have limits, beliefs, and expectations. So, you have to start the change process slowly.
- • Step 1: Gather the leadership team, family, or key employees and see if you can all agree on the PURPOSE of the business (we’ll talk about that next). What does each of you want and are you aligned?
- • Step 2: Identify the gaps.
- • Step 3: Take a Field and Balcony Viewpoint – This simply means to combine high-level (balcony) views with ground-level (field) insights for a balanced understanding.
- • Step 4: Eliminate the need to start suggesting/implementing quick fixes or tactics.
- • Step 5: Ask new questions and challenge traditional roles and norms.
The ultimate goal is to "Align The Golden Thread" throughout the entire organization so your team is empowered and you can start to let the people make decisions and ultimately run the business.
2. Purpose: Aligning with Core Values
A successful transition is deeply rooted in the purpose and values that define your business. This is the "WHY". Mission and vision are the what and how.
Reflect on what has driven your company's success over the years. Ensure that your successors and team members are aligned with this core purpose. Communicate your vision and mission clearly, so everyone understands the direction and goals of the company. A strong sense of purpose will guide your business through the transition and beyond.
People + Purpose are half the battle and foundational to growth. Now, let's talk acceleration with points 3 and 4.
3. Processes: Streamlining Operations
Efficient and well-defined processes are essential for a seamless transition. The old ways of working are outdated. There are new tools that will eliminate the stuff we hate doing and accelerate our progress.
• Step 1: Take the time to document your business operations, from day-to-day tasks to long-term strategies. This documentation will serve as a valuable resource for your successors, helping them understand how things work and allowing for a smoother handover. This is your playbook.
• Step 2: See where you can automate and add more tools, less human intervention.
• Step 3: Regularly review and update these processes to ensure they remain relevant and effective. Can’t stress this enough. Plan, Do, Review (rinse and repeat).
4. Partnerships: Leveraging External Relationships
Strong partnerships can significantly ease the transition process. Cultivate relationships with suppliers, customers, and industry peers. These external stakeholders can provide valuable support and stability during the transition. Share your transition plans with key partners and seek their input and assistance. By fostering strong partnerships, you create a network of support that can help your business navigate the challenges of change.
I can count at least half dozen major life transitions that I've gone through and all were possible because of "partnerships".
5. Profit: Ensuring Financial Stability
This is the score card in business... But, if we get the first 4 steps right, then this will come. We never neglect profit and are cash flow focused (unless its a B2B SaaS play, ha), but Purpose Over Profits wins all day...
Final Thoughts
Transitioning your business is a significant milestone that requires careful planning and execution. By focusing on People, Purpose, Processes, Partnerships, and Profit, you can create a solid foundation for a successful transition.
Weekly Take-Away: 👉 Is there a pace to business growth? 👈
For 20 years, we've used the saying... You've can't hurry up the birth of a baby. Business has a pace, a flow, an energy. The quicker we realize that and can find the rhythm, the less stress we're likely to have.
Till next week, keep rocking it...
You Got This,
Andy
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