1. Empower and support the general manager
It’s important to maintain a good balance between staying involved as chairperson and offering the right support to management versus remaining over-involved. There should be regular, scheduled interactions between the general manager or CEO and owner however, for the most part, the business owner should aim to stay away from the day-to-day to accelerate the transition.
Within appropriate levels of accountability, ensuring the general manager has autonomy and is empowered to deliver results is key. It isn’t easy to step out of day-to-day business activities however owners must transition out of the business to achieve growth objectives.
2. Get the right finance skills
To get the business up and running requires one set of finance skills. However, the chair requires a number of superior finance skills to be successful in driving accelerated growth. These are:
· greater depth of balance sheet understanding
· understanding different options for funding the business
· understanding different models for investment analysis
· appropriate financial governance techniques.
3. Reviewing the different options and choosing a way forward
Once the business structures and processes are in place to underpin reliability, and cash flow is being generated to support its operation and future growth, the owner as chairperson will have time to focus on new growth options.
Some growth options will be more involved and complex, so it’s important to carefully consider the right approach for any individual business. Among the many options to consider are mergers and acquisitions; franchising and licensing; geographical expansion; or channel expansion.
It’s important to consider which business model will suit best. For example, a franchise or licensing model offers a high degree of leverage as the growth will be driven by the capital and time of the franchisees, not the owner. Other things to consider are scalability, marketability, risk levels, and potential return on investment. These factors will all help to determine the right business model.
In all cases, their successful implementation depends on the owner, as Chairperson, investing sufficient time and effort on them. In most cases, this is only possible after stepping back from the day-to-day.
4. Change the mindset
Ultimately, a successful transition out of the business will come down to the mindset of the owner. Generally, most business owners will have a combination of intimate knowledge of the business, emotional attachment, and deeply-held familiarity. These all underscore the challenge of stepping back.
The first suggestion for business owners undergoing transition is to recognise that they are not the business. They are investors in the business. Changing this belief is absolutely central to being able to step back from the operations. Once business owners change this mindset, they can achieve the true freedom that business ownership can deliver. Reaching this point can trigger serious growth in the business, either because the company has to operate properly to enable them to step back, a skilled general manager is in place, or the owner can pursue a larger strategic growth plan.Register