How should business owners prepare for their eventual exit?
Roger Greenberg has put an extensive amount of time into getting ready for his own departure. The CEO of the Minto Group, one of Ottawa’s most recognized companies, started planning more than a decade ago for the moment when he steps down from the firm.
Minto Group CEO Roger Greenberg. (File photo)
Since that time the company has worked with U.S.-based family business advisers, hired a change management consultant and drafted a family mission statement.
All of it was done to get the company ready for the moment when Mr. Greenberg finally hands over the keys to his successor a few years from now.
“It’s the elephant in the room; nobody wants to deal with it, nobody wants to talk about it because they’re afraid that if they say something it’s going to upset the apple cart or whatever,” said Mr. Greenberg.
“But the fact of the matter is everybody’s thinking about it, everybody’s worried about it.”
Minto has confronted a problem that every business owner, whether they’re retiring, selling or turning out the lights, has to face at some point: what’s going to happen when the company’s main figurehead is no longer around to run the ship?
Extensive prep work might seem like a lot to entrepreneurs who still don’t know if their business is going to be around even a year from now.
But those who work to help prepare business owners for their eventual exit say it’s never too early to start thinking about it.
The problem with handing a business off is that so much of its success is tied to the person who either started it or ran it for an extensive period of time, said David Saxe, who owns Ottawa-based Next Level Business Planning.
He or she has the passion for the company and, in many cases, most of the knowledge about how it needs to operate on a day-to-day basis to survive. This can either minimize the business’s resale value or make life difficult for a son or daughter who takes over, he said.
There are many ways to help solve this problem, from writing some of that expertise down so others can read it later to getting younger generations involved at an early age, but they all require the same ingredient: time.
“Once a business owner has employees and is starting to grow the business, he’s past the period where he’s concerned about whether he’s going to survive or not ... to me that’s the time to start thinking about it,” said Mr. Saxe.
Much of Mr. Greenberg’s obsession with succession planning goes back to when, at age 35, he took over from his uncle as part of the family’s last transition.
The firm had done next to no work preparing for his uncle’s departure, he said.
There were no family meetings or discussions on who was going to take over. When he died, the company had no clear approach to handling the switch to new leadership, he said.
Meanwhile, the owners and managers at longtime Ottawa sporting goods retailer Tommy and Lefebvre first started talking about their plan for the future of the business seven years ago, said vice-president Natalie Tommy.
That led them to this year, when the company was sold to Toronto-based retailer Sporting Life.
The business’s three shareholders were getting older and wanted to get their money out, said Ms. Tommy.
It also allowed her and her husband to continue working for the business for at least the next year.
“We’re really excited about it,” she said.