Why You Need To Communicate Your Exit Plan
For a business to run successfully, business owners need to clearly communicate their goals and aspirations with their employees, particularly their management team. This is particularly important when it comes to your exit from the business. However, to truly have a successful exit you need to understand what to say, to whom, and most importantly at what point of your exit. Communicating not only helps your people to prepare for your departure from the company it can help them get ready for what comes next. But when you communicate is just as important as what you say.
When Should You Communicate?
Selling your business can be exciting but it is also all-consuming. Potential buyers may start to think you are taking your eyes off the ball. It could seem that you are not paying enough attention to the business and ignoring the market. If you communicate too early, a competitor could hear about your exit and take advantage of your distraction and your business will end up suffering.
When the time does come to communicate your plans, you and your buyer need to ensure that both your customers, suppliers, and employees will be happy with the new ownership. It is vital that they remain loyal to the business and key team members stay on in their roles, otherwise your exit will not go to plan and your company can lose value.
What Do You Want?
Your team need to know what you want from your exit, especially if you are considering an MBO or sale to an Employee Ownership Trust. They need to know your goals and plans for the business, and to understand the exit path you have chosen.
Communicating your objectives and timeline will not only help prepare your team for what’s next, but it can also help you in your exit plan. Your most trusted team members are a valuable source of advice and support about what’s best for the business following your departure and achieving the exit you want. This will also help to ensure that key members are retained because if they are unhappy with your plans, they might also decide to leave the company.
Share Your Knowledge
Sharing your knowledge and the secrets of your success are an essential part of your transition from the company. It helps to ensure that your team are ready to take the next step with you and it is part of building value for your business, ensuring that you get the deal that you want. Educating your management team or future owners on how your company works, the tips and tricks you have mastered over your years in charge can help your business to survive. If you want your business to thrive after your departure, share what you have learned. You can ensure that the future of your company is in the best hands because you have taught your successor the best way to do things. Whichever exit path you have chosen to take, the future owner needs to be assured that your business has value creation at its core.
Your choice of replacement may not have the skills required to run a successful company, particularly if it is your management team. They may know how to lead and manage but do they know what it is like to be an owner? Guide them, show them what to do as you prepare for your exit. You need to invest time to prepare your team for an employee or management led exit, and to help them to transition to an owner led mindset.
Resolve Problems
Communicating your exit strategy is a way for you to resolve issues that may arise. If your team are unhappy about your plans and goals for the business after you leave, you need to listen to their concerns and the issues raised. These can help you to refine your exit strategy. Communication is key here as if you say nothing about what you are planning, you could leave your business in a state of disarray, your people dissatisfied, and damage the chances of future success. Some exits are completed without consulting the team making the post-sale communication process seeking to retain key personnel and ensure that business runs as usual considerably more complex.
Communication is key in every business, even when you’re developing your exit strategy. It can help you have a smoother exit, keep your team on track, grow the business and make sure it is thriving rather than being distracted by the possible uncertainty caused by your exit. It will be a happier and easier change for everyone.
If you need help to effectively communicate your plans for exit, get in touch with our hgkc consultants.
To learn more about Exit Planning, read our page and answer any other questions you may have.
