Selling Your Business – Does the value walk out with you?

A new Indiana Jones film is set to be released in 2019. Harrison Ford, who is confirmed to be reprising his iconic role, will be 77 by then. It was recently announced that many in the UK will have to work until age 77 to get the same standard of state pension as their parents, but they probably won’t have to fight Nazis, traverse canyons or escape snake pits in their job roles. Is 77 pushing it for an action hero?

Perhaps the more pertinent question for us is can a successful film franchise (or business for that matter) continue without its charismatic lead character? Star Wars, the other huge franchise associated with Ford, has been able to do this. December’s The Force Awakens introduced a raft of new, younger characters for the baton (or lightsabre?) to be passed on to. The original cast can take a back seat or depart entirely, leaving a new generation to fill cinemas and make money for Disney.

Which franchise does your business resemble? An Indiana Jones film requires Indiana Jones. It needs Harrison Ford, regardless of age. Your name isn’t necessarily in the title (though it may well be) but is your business a lifestyle business entirely dependent on you? Or, have you built a value business like Star Wars – a setting where new stories can be told once you’ve decided to call it a day?

Either option is fine. The problem comes when people don’t realise what they have built. Specifically, people who believe they have created a value business they can sell on, but have actually created a lifestyle business whose value is entirely or significantly tied to them – they have accidently become Indiana Jones. A business’ over-reliance on its owner is one of the first things a potential buyer will look at.

Humility and modesty are good qualities but to ensure you aren’t setting yourself up for a fall when you come to sell, you need to be brutally honest about your strengths. How much value do you add? How many clients do you win thanks to your experience and reputation? How much of your business’ value walks out the door with you? Being valuable is normally no bad thing, it’s only a problem if you want to sell and (like all problems) once you are aware it exists you can take steps to rectify it.

Succession planning has two levels. There is a practical need to ensure that your business can continue to function when you choose to sell. This means growing your business, taking on staff and expanding. But just finding capable and trustworthy people isn’t enough – you need to imbue them with your value. You need to give them valuable work and in order to do that, you need to let go.

The new characters destined to keep the Star Wars franchise alive needed decent parts written for them if the endeavour was to succeed. If your staff are all supporting actors, of course value will drop when the lead leaves. Let them take the lead. Take a lesson from long-running TV shows such as Game of Thrones or The Walking Dead. Unlike shows of old, they expect cast turnover. He value can’t ride on core characters who may depart, ‘lesser’ characters may be required to carry the show forward and thus the storylines and writing for every character needs to be engaging.

Are you writing good parts for your people? If you don’t include them in a valuable story your business’s value will continue to be tied to you and you alone. Delegate responsibility, listen to ideas and bring others to the fore. Establish systems, methods and expectations that add intrinsic value to the business. Letting go isn’t always easy, but a trusted mentor can help you with the transition. The more value you build into your business and your people, the less you will lose when you finally decide to hang up your fedora.