Most advice about the next chapter of a business starts with the owner. What you want. What you need. What the business is worth.
Those questions matter. We think the plan should start somewhere else: with the entire team.
The people who answer the phones, run the trucks and keep customers coming back built a big part of the value. A buyer or partner is paying for what they do every day, whether the deal says so or not. If they leave, a lot of the value leaves with them.
So here are three questions we think every owner should ask early, and what to do with each one.
1. Who runs the day when I am not there?
This is the one most owners would rather skip. In many owner-operated businesses, the honest answer is "nobody, really." The owner approves the big quotes, calls the key customers, fixes the problem nobody else can fix.
That feels like being needed. From the outside, it looks like risk.
A few practical steps:
Take a real week off. Not a phone-in-hand week. Write down every call, decision and fire that comes up while you are gone. That list is your to-do list.
Name a second in command, and mean it. Give that person real decisions with real money attached, and let them make a few mistakes while you are still around to help.
Write down what lives in your head. How you price. Which customers need a call and which need an email. How you handle the vendor who is always late. If it is only in your memory, it is not part of the business yet.
Hand off relationships slowly. Bring a team member to your next customer meeting. Then the next one. Then let them run it.
We cover key-person risk in more detail in Preparing your business for its next chapter.
2. What happens to my people and my name in the next chapter?
Every owner we talk with cares about this. Few of them ask it out loud early enough.
Different paths answer it differently. A family handoff, a sale to management, employee ownership and an outside partner each come with their own tradeoffs for the team and for the name on the building. We walk through them in Succession options for owner-operated businesses.
Whatever path you lean toward, a few things help:
Decide what is not negotiable before you talk to anyone. Keeping the name. Keeping the location. Keeping certain people in their roles. Write it down. It is much harder to hold a line you never drew.
Ask every potential partner the same plain questions. What happens to the people in year one? Who will actually run this? What does year three look like? Do you plan to sell again, and when?
Listen for specifics. "We value our people" is not an answer. A real plan for retention, pay and leadership is.
Think about timing for telling your team. Too early can create worry. Too late can feel like a betrayal. A good advisor can help you find the right moment for your situation.
3. Will the team have a real stake in what comes next?
This is the question closest to what we believe. Our vision is an economy where the people who build the value hold the value.
A stake can take different forms. It might be equity for a few key leaders. It might be a broader employee ownership structure. It might be a bonus or profit-sharing plan tied to the long-term results of the business. Each one has real legal, tax and administrative work behind it, so talk with an attorney and a CPA who have done it before.
A few questions to sit with:
Who are the two or three people the business could not run without? What would it take for them to stay through a transition and beyond it?
Do your key people want to be owners? Some do. Some would rather be great operators with fair pay and a clear future. Both are fine. Ask them.
Will a stake be real? Ownership that means something comes with clear terms, a fair value and a path to getting paid. A vague promise can do more harm than no promise at all.
Where it fits the business, Greenleaf offers key team members a path to ownership. It will not be the right answer for every company, and we would rather talk about it honestly than promise it up front.
Start before you need to
None of these questions has a perfect answer. They do have an earlier answer and a later answer, and earlier gives you more options.
You do not need to have a buyer, a date or a number to start. You need a team that can run the day, a clear view of what matters to you, and an honest conversation with the people who helped build it.
That is the long game. We have been playing it since 2012, one great business at a time.
If you are starting to think about the next chapter and want a candid conversation, reach out to us here.
Sources
This article cites no outside statistics. The vision statement and the 2012 start date come from Greenleaf Capital Partners.