Let’s face it, times are tough. No matter how good the intentions and no matter how great the team is right now, if you choose to be acquired (or fold) there will be negative consequences.

We’ve all heard the horror stories; dedicated people being walked out the door, culture morphing from “best workplace” to “sweat shop”, or a thriving company declining to the point of bankruptcy.

As the leader of a company, you’ve spent years building the value of the organization, mentoring a great team, and serving good people who value what your team does.

The Options

Whether you’ve reached a point where… you want a life or the state of the economy has led to you to consider selling out or just folding up, here are three alternatives to contemplate.

1. Transform your business to fit your current life instead of fitting your life around your business.
   • If you’re too big or diverse to manage with the current resources, become more specialized.
   • Narrow the focus of your marketing, accept only new clients who fit specific requirements, and who support favorable pricing.
   • Investigate achieving a higher net profit margin at a lower gross revenue. If you maintained only your best customers and only add new similar customers, would the resulting lower cost provide sufficient net income?
   • If you’re too small to compete effectively, consider a joint venture to gain capability, specialize roles and function, while spreading financial risk.
2. Keep the organization in the “family” while capturing wealth. Help all the employees (ESOP) or a select group of employees become the new majority owners. You can cash out while remaining involved in the company.
3. Find a successor. While multi-generation businesses are attractive options remember, a successor does not necessarily have to be “family”. In either case, consider these three important aspects.
   • Succession ought to include “earning in”, a business transaction is not a gift;
   • Stay involved in key decisions at least until ownership majority shifts;
   • Bonus out cash for the owner without cannibalizing the company’s capability or resources.

Your Vision

The key to any succession is to clarify and sharpen your business before making any transaction. It begins with knowing the vision of your business along with an honest evaluation of the strengths, weaknesses, opportunities, and issues of the entire organization, the organizational structure, and your core processes. Once you understand that, do the math and be brutally honest with yourself, the leadership team, and stakeholders.

If you would like a roadmap to help with succession, acquisition, downsizing or any other major shift in your organization, take a look at EOS® – the Entrepreneurial Operating System – it’s not just for growing companies. EOS has the tools needed to weather any storm and help you, your team, and your company get ready for the next transition. If you need any help along the way, we have four facilitators at CultureShoc that are here to help.