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Baby Boomer business owners have worked hard all their lives and are now at a stage where they have built up a business (which has given them a good income and lifestyle) and are now wondering what their options are for exiting their businesses.

Do you want to grow your SME business but spend less time in it?

Securing a talented Business Partner for growth or as part of a gradual exit plan can be an excellent option to consider. By allowing someone to buy into your business rather than appointing a solely salaried GM will get you higher capability and a person who is looking for skin in the game.

You are 65 and looking for an exit strategy however you have a 50-year-old business partner who has quite a few more working years remaining. You are both integral to the business however you have a completely different set of skills. Your business partner cannot buy you out and, in any case, there will be a capability gap as he cannot slot into your role in the business. Rightly your current business partner will have a significant interest in who buys your shares as this person will become their business partner and play a key role in the ongoing success of the business.

A dramatic (if not brutal) example of reaction to sudden change has stayed with me from my childhood. I witnessed how a live crayfish shows a limited reaction when the water it is in is slowly raised in temperature until it is ultimately cooked versus the violent response if one is dropped in boiling water*.

Securing a talented Business Partner for growth or as part of a gradual exit plan can be an excellent option to consider. We hear of success stories as well as unsuccessful outcomes and it always comes back to the same actions that lead to success.

Here are some tips on what to do and not do to make it a success.

For John and Judy Small, their business was their identity.

John had started the business 30 years ago in his garage at the back of their suburban home. He had an idea, researched the market and discovered that the automotive industry was lacking in a certain product (product and business fictional). He talked to the car manufacturers and the new and used car dealers and soon had several orders that were going to be difficult to fill.

It is well documented that SME business owners often find it difficult to find quality staff to help grow their business. The degree of difficulty in attracting talent is enhanced when the business owner needs senior level talent.
There are however talented senior leaders well suited to working in a small business so how are these people found?

A recent report from Westpac highlights some very interesting aspects surrounding businesses older business owners facing transition.

In short, older business owners are less likely to invest in innovation and capital to expand and grow their business as they are very focused on “how to get out” and “spend more time on lifestyle options”.

We sometimes come across business owners working in their business who explain they have a staff member or members identified who will buy them out when they are ready to exit the business (MBO). This can be a great option and the person is usually someone who is loyal and trusted and often a gradual process is introduced for this person to transition into the business. It can however also be an easy or comfortable option that may not always be the best solution for the business or the owner.