An article that ran in the Washington Post on May 9, 2017 discussed the “Silver Tsunami” once again. An excerpt that really struck me reads, “According to Project Equity, many small business owners do not have succession plans–and because of this they’re putting their employees at risk.” As a small business owner I empathize–we tend not to think ahead. This leaves us with fewer choices when it comes time to retire. Without a succession plan, many of these businesses ‘will just quietly close down and go away,’ says Project Equity’s co-founder Alison Lingane.” (full article here). I can understand this and am witnessing it with several of my clients. Some come to me openly and tell me of their plan to wind it down. They have consultant businesses, typically after closing down or selling a larger business of some sort. The consulting was a step toward their exit from the workforce. In these smaller versions of their former glory, they usually have one or two part-time employees. Some have a small team. I’m usually the only one that knows the plan, excepting their attorneys and families. Their staff, contractors and more are counting on the steady income they have known. Disrupting that cash flow disrupts their lives and they will need to fill in the gap, either with a new job, or securing more clients to fill in the hole left by the existing client.
For many of us, the population will continue to age and exit and we are prepared to handle them as they are ready for transition. However, for employees that are counting on a steady paycheck, and perhaps benefits, the change can throw their families for an economic loop. There usually isn’t a buyer in sight for these smaller firms, because in many cases, without the CEO, there is no business. THEY were the main commodity and without them not only are there no parties interested in filling the shoes, but the clients the smaller business served won’t likely be interested in continuing doing business without that CEO.
What can you do if you work for one of these smaller companies with a Boomer at the helm looking for the nearest exit to retirement? If you are interested in taking on the lead role, I have a few ideas, depending on how much you love what you do for this company, and how good you are with the clients. Introduce the idea of a succession plan.
Creating a Succession Plan: Think and ACT Ahead
- If you think you may be interested in stepping into the CEO seat – talk to the existing CEO way before they ever bring up the topic. These types of training and re-positioning strategies take time to prepare the team and the clients – as well as preparing yourself with the skills you will need.
- What new skills do you need? You probably need to start participating in all client meetings so they get accustomed to you and you learn their needs and goals.
- Is there anyone else on the team that can help fill, or continue to fill in the gaps that don’t meet your skill set? Talk to the existing CEO about bringing them into the conversation of possible transition.
- Chances are the CEO would love to get some money for this business. But, without them, the value may be minimal and it will all be on you to keep it going. Consider talking to them about a commission on all continued business from the existing clients for a year. You and your attorneys can work out details, but that is a better deal for them than simply closing up shop.
This could be YOUR time to take the lead and ride this all the way to the bank. You’d be working in a familiar company with familiar clients and team members, and be able to integrate your ideas. But, be careful of changing too much that already works. Slip improvements in until income begins to grow, then bring on your newer, possibly riskier ideas to test them out. Perhaps that CEO you’ve looked to as your leader would be pleased to transition to your mentor. By introducing the idea of a succession plan to your present CEO, you position yourself perfectly to assume the role of leader when the time comes.