In a recent blog article, I talked about how business owners often have difficulty envisioning a future without them at the helm of their companies. As entrepreneurs, our personal identities are so closely tied to what we do in and for our companies that the mere thought of transitioning out of business ownership at some point in the future can cause separation anxiety. Mix in fears–perhaps of perceived personal failure, our own mortality, or "the unknown"–and you can see why many business owners tend to avoid the topic altogether. But without careful preparation for an ownership transition, the results of a sale, if it happens at all, are bound to be disappointing.
Other than emotional issues, I believe that lack of factual knowledge and reliance on guesswork and false assumptions can also hold owners back from creating a strategic plan that could deliver the outcomes they want or need.
Lack of knowledge tends to fall into three large categories:
“This is my company. It will be mine forever.”
One of the hardest conversations to initiate with a business owner is about that point in the future when their company is no longer theirs. It’s a well-known fact that none of us will be on this earth forever. Therefore, the company we own today will at some point have to be either closed or transitioned to another party. Yet, many business owners become defensive at the mere mention of words such as “exit,” “sale,” or “ownership transfer,” abruptly closing down any further dialogue.
Having to part with our company is not a subject many of us enjoy contemplating. The thought of it seems to stir up fears–perhaps fears of our own mortality, failure, making irreversible mistakes, loss of personal identity post-sale, etc. That’s why talking with business owners about their (ideal) “end game” is not always as rational a conversation as it...