I had fascinating conversation with the owner of a professional services firm about what the future of his business could potentially look like over the next five years. The conversation included a discussion about a succession plan dealing with his exit from the practice.
art of the growth strategy, the owner was actively seeking to hire a senior professional, who, subject to meeting performance KPIs, would become a partner in the business. When the person became a partner, they would acquire equity in the business thus releasing capital to the existing business owner. The new partner will increase their equity stake in the business in accordance with an agreed plan for the business owner to exit the business.
The business owner was excited and enthused by the plan as he was already looking at various people to approach with an offer to join the firm.
My response was to ask him the following simple question:
“Do you play well with other kiddies in the sandpit?”
In response, the business owner reflected that over the course of his business life, he very much played by his rules according to his own values & beliefs. At times, this led him into conflict with others that resulted in him leaving those businesses.
One of the reasons he established his own practice was that he would be able to run & grow the business according to his values & beliefs and only be accountable to himself for its success or failure.
Given this, he realised he did not play well with other kiddies in the sandpit, nor did he want to play with other kiddies in the sandpit.
As a result, the succession plan changed to until he was ready to sell 100% ownership in the business, his focus was on implementing strategies to grow the business.