How to prepare your business for life after you

For most business owners there comes a point when they want to or need to step back. This could be due to retirement, moving on to different pursuits or simply to avoid fatigue. The question is: how do you best prepare your business for success after you have left?

Here are some key considerations for you to consider.

1. Develop a strong leadership team

In a smaller company, this simply means gradually giving your key managers real responsibility. Allow them to make decisions, even if you’d sometimes do things differently. It’s far better to work out the issues while you’re still present than to hand over a totally untested set up.

Start asking yourself how would the business run were you incapacitated suddenly.  Who would run the various aspects of the business? How can I support them now so that they could run it better if I wasn’t around for a bit? Are they properly incentivised? On the right contracts? What if they left?

2. Redefine your own role

Reassess your own role and ask yourself: which tasks genuinely require me? Which tasks can be delegated? Removing yourself from day-to-day responsibilities helps you focus on the bigger picture.

3. Keep ownership and management separate

Founders often assume that stepping down from a company means selling, which is not necessarily true. You could consider retaining your shares and staying involved at the board or advisory level, while promoting or hiring someone to manage the day-to-day business. This lets you benefit from the company’s growth without being chained to the daily grind. An Employee Ownership Trust would allow you to sell to employees but stay running the business if you wished, or step back gradually.  

4. Clarify your procedures and systems

The more a business relies on “what’s in your head,” the harder it will be for anyone else to lead. This is a hard to identify, especially if you enjoy being at the centre of things.

Try asking yourself a few simple questions:

• How many decisions land on my desk during a typical day?
• Do they all need my input?
• If I wrote down the core processes, could my staff execute them without waiting for me?

Having up-to-date procedures, strong accounting systems, and clear contracts with customers and suppliers will make a massive difference. The clearer you are, the less your team needs to defer to you. The more you can automate the better.

5. Prepare the narrative for your staff and customers

Transitions can make people feel unsettled. In a smaller business, staff may worry about job security, and customers may presume a drop in quality.

Good communication is essential. Explain the plan clearly, show genuine confidence in your team proactively reassure your stakeholders and customers.

Final thoughts

Every founder will eventually face the decision of how long to stay directly involved in their business. Planning your step down in advance helps to make your business stronger, gives you more options, and protects the company value which you worked hard for.

If you would like advice on stepping down, succession planning or a wide array of other business functions, please contact us today.