In February, I had the opportunity to talk to 7,000 conference attendees at Win the Storm, the nation’s largest roofing, restoration, and solar conference in Dallas, TX. Since I’d also just been recognized as a Comeback Kid (an award that goes to roofing contractors who have rebuilt their businesses after experiencing extreme setbacks or hardships), I decided to tell the audience a little about my story — how I went from nearly dead to building a company with over $30 million in revenues in just a few short years.
As I spoke, I realized that a lot of my business success has to do with succession planning. When I first started having health challenges — when my heart failed back in 2018, I knew it was time to make sure my roofing company was taken care of. I knew that if it couldn’t survive without me, evenly temporarily, it wouldn’t make it at all.
Dealing with the Unexpected
Honestly, taking care of the business wasn’t the first thing on my mind. I was still grappling with how a healthy 40-year-old could be the victim of heart failure. Luckily, the management team at Shamrock Roofing had faith in me. And they had confidence in themselves. They believed they could keep the place running while I was out of commission.
That was four years ago. Today, I’m living on a new heart donated by someone who realized the importance of being an organ donor. I’ll be eternally grateful to that unknown person. I’m alive, my business is thriving, and I’m eternally grateful every day for the blessings that have come my way.
My team was right. They did keep the place running and have done so several times more over the past few years when I’ve landed back in the hospital. Our revenues have doubled over last year and continue to grow exponentially as we expand into new markets. But none of this would be possible if we hadn’t put a succession plan in place.
Winding Down Gracefully
Seasoned business coaches often tell young entrepreneurs to start their businesses with the end in mind. That is, get the business going, but have an exit plan in place so that when it’s time, you can get out gracefully.
I know from experience that it’s better to plan proactively to get out of a business rather than having to do it reactively. Whether you’re retiring, wanting to take on a new challenge, or are in the position to seize a unique opportunity, having a succession strategy in place will be invaluable in moving on to the next phase of life.
Succession Strategies for Success
A succession plan is intended to help guide the business through a change in ownership. Whether the company is sold, taken over, or dissolved, an exit strategy helps guide employees through the process. It helps preserve the business for the future while relieving stress for those left behind.
Here are a few of the most popular exit strategies used by today’s business owners.
Sell the business. Many entrepreneurs start a company with the idea of building it into something sellable within ten years or so. Other owners start their business to fill a need and are pleasantly surprised when it grows beyond their wildest dreams into something someone will pay money for.
Selling the business is an excellent way to exit the arena, provided the business has enough assets and revenues to be appealing to another party. Competitors are often interested in buying a company in their industry because the sale gives them immediate access to a new customer database, expanding their reach in the market.
Many business owners are part owners with someone else. In this case, it may make sense for the existing partner to sell their portion of the business to their partner — assuming they’re not also ready to retire. Another option may be to sell to a trusted employee who’s interested in taking the reins.
Turn the business over to an heir. For owners with grown children who would inherit the business upon your death, turning it over to one of them now may be the best option, assuming they’re interested. This option works especially well if the heir has been working in the business for a while. You’ll need to be clear about ownership and roles within the company, especially if two or more heirs are involved. But this solution often allows you to stay connected to the business in a reduced capacity if that’s what you want to do.
Wind it down. In some instances, a company may not be big enough or have enough assets to warrant a sale. In this case, it may make sense just to wind it down and close the doors. Sell the few assets you have, notify customers of the impending closure, and get ready to enjoy your retirement years.
It’s Never Too Soon to Start Planning for the End
If your company has only been in business a few years, you may not be thinking of getting out at this point. But it’s never too early to start planning an exit strategy. It not only provides peace of mind for the future, but it also gives you a marker to work toward, especially if an eventual sale is on your mind. When the day comes for someone else to take over, you’ll be glad you spent the time now to put a succession plan in place.