Now it’s Mom and Pop’s turn. Last month I wrote to you about being a successful successor. What about being a successful predecessor? That takes work too, so here are 12 rules for predecessors (current owners of the business). They are similar but different than the rules for the successor.
Here’s an example of a statement I often hear: “Since we are a franchise shop, I paid to have them send a rep out to help with the business. I was told flat out that unless Mom was willing to make the commitment to do what needed to be done on her own, I should simply work as an employee until things got better or the doors closed! I agree.”
Just because you’re the brilliant founder of this business does not mean you can retire in place and set up some sort of perpetual motion machine that will keep paying you cash forever without any further work on your part.
Getting Your Way
The General was having a staff meeting. The General was pontificating about a new marketing plan he devised while at the last trade show. The Lieutenant is worried since he just came back from the battlefield. The General hadn’t visited the battlefield in years. “Sir,” the Lieutenant says, “I know that you are fascinated with the latest tank and you really want one, but our battlefield is a swamp. And unless that tank can float, it won’t do us a lot of good.” The General agreed, but took all of the assets at his disposal and traded them for a tank anyway. He liked the salesman. Besides, he’s the big picture guy and doesn’t have time for details. Think this army will succeed? I don’t.
Sometimes Junior and Junior Miss are right. And they are right most of the time when they are doing the work while Pop (and sometimes Mom) fiddles. Just because you have a successor in place, and just because they are capable of taking on additional responsibility, doesn’t mean you can quit and do what you want to do. Someone still has to drive this car, regardless of who owns it. And this boils down to the predecessor’s role in the business, right up to the minute they turn it over to someone else and walk away. Instead of being the pontificating General, be a good President. Do what’s most important, not what’s most fun.
Yes, but some owners insist that they don’t have to work. Take this quote from a print shop owner from their local newspaper, “[Running a print shop] isn’t all it’s cracked up to be, but I hope to build something for the future … I guess everybody has that dream of someday sitting back and having someone else run it for you,” he said. “It hasn’t happened here, yet.” Well, it’s not going to either. If that is your idea of being successful, then get a better idea. All you want to do here is to do what’s most fun.
Evaluate the Situation Realistically
Do you have enough money to retire now? If yes, go for it and do what’s most fun. If no, and especially if the business is going to form part of your retirement, then get busy.
If you need $750,000, is your business worth that? If yes, then sell the business to Junior for that amount (or to someone outside the business) and get out of the way so Junior or Junior Miss can make more money—and don’t read any further. You don’t need to work since your goals are already met.
But, if your company is not worth that, then you’d better be working on the business, polishing it, and improving it until it is.
Remember, only about 35% of all businesses available for sale in the US really sell. So, if you have a successor in place, you’d better be training and teaching. And guilt is not a transition plan. Just because you bred them, fed them, and led them doesn’t mean they will stay put forever. This is particularly true if there is more than one.