Next Gen Shareholding
Most founders and business owners haven’t thought about their exit strategy from their business.
They either put it off because they don’t want to think about it just yet or they genuinely get consumed with the day to day running and building of their business that it gets forgotten about.
There are plenty of stories of business owners leaving this decision until it’s too late and not giving themselves enough time to properly plan for their exit.
This leaves them with very few options and they either sell for a much lower value than what their business is really worth or they just shut the doors, turn off the lights and walk away.
To me - that’s such a wasted opportunity, when some planning, a good strategy and consistent effort can have you realising maximum value for your business when the time comes to hang up the boots.
Planning for your exit from your business needs to be thought about now and planned for now as this informs the strategy that you put in place now.
One option is bringing on next generation shareholders into your business.
This is an excellent strategy as it does a number of things:
1) Creates legacy. It ensures there is a new wave of leaders and owners coming through your business who will eventually take the reins and continue the legacy of your business.
2) Builds depth. You’re surrounding yourself with key individuals who are now highly motivated with skin in the game who will help build the business alongside you.
3) Spreads risk. There is a concept in business called ‘key person risk’. It means that when the success of your business relies too heavily on one person (you), the future of your business is at much higher risk. Having other shareholders in your business spreads and reduces this risk.
By bringing on next gen shareholders, you’re also securing your exit strategy from the business.
As time goes on, you can start to sell down your larger share ownership in the business to the other shareholders in phases and then eventually sell out and exit the business altogether (when you’re ready).
Don’t leave it to the last minute to think about and plan for your exit strategy from your business.
The best time was when you started your business, the next best time is now.
To your success.
Josh ‘Next Gen’ Stone
PS: If you’re interested, here are 4 ways I can help you right now:
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