So You've Been Watching (And Cringing At) HBO's 'Succession?'

Let's discuss some less-dramatic exit options for business owners (when they want to step away).

You may not run a global media conglomerate, but even closely held business owners (and perhaps especially closely held family business owners) can find themselves in a bind if they fail to prepare and implement a thorough and regularly updated business succession plan.

Planning for the future of your business, family, employees, and yourself requires thoughtful deliberation and consideration of your goals and the opportunities available. Maybe, in HBO's dramatic style, more than one of your children think they should take over. But, just as possibly, maybe no family members feel called to take over the business.

A little early planning - and some basic knowledge about some other exit strategies available to you - can go a long way in ensuring a smooth succession and transition to the next phase of your life.

Management Buyout

You may already have an answer in-house: Are there managers or high-performing employees who are ready and willing to buy-in - both financially and culturally - to the business you've built? If you haven't thought about that possibility or discussed it broadly as part of your business culture, you may not even know if one of your managers is waiting in the wings.

One benefit of looking inside for an exit strategy: you have the opportunity to groom, handpick, and craft your senior management team as employees, long before the need for an ownership transition. The earlier you start, the longer you have to identify, hire, and train the best candidates. However, we often see business owners ignoring this aspect of growth. While they are focused on growing and improving the services provided by their business (by hiring a high-performer in sales, for example) they don't often consciously focus on finding the best shepherd to take over the whole company when they're gone. In the event you don't have eager children or family members ready to step up when the time comes, this business "tunnel vision" may have cost you a lot of valuable planning and grooming time.

Consultants can help owners play catch-up and identify potential internal players whose culture and experience align well with the current owner's goals - but without a conscious effort, past hires don't always provide the right "pool" from which to choose for a straight management buyout. We encourage owners to start thinking about this possibility early on.

ESOP

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