As the saying goes, you can’t do everything. That’s why delegation is one of the key skills that any business owner must master – however grudgingly – if they are to successfully transfer their business to someone else.
The obvious upside of delegating more to your team is that it gives you extra time to concentrate on critical tasks, like growing the business. But let’s look at some less obvious (but no less compelling) reasons to delegate – all of which are related to succession and exit planning, and the eventual sale of your business.
1. Your business will be less dependent on you. The ultimate aim should be to create a business that can function well even when you’re not around. This delivers all sorts of short-term benefits (not least, being able to take a holiday without being glued to your emails), but it also supports exit planning, making your business more attractive to buyers in the long run (see point 3).
2. Your management team will be more effective. While freeing up your own time, you’re enhancing the skills, utility, experience and performance of your management team. This stands your business and your people in good stead for the future, especially if they are interested in taking on the business themselves, for example through a management buy-out.
3. Your business will be more valuable. The combination of a more independent business and an effective management team makes a company much more attractive and valuable to potential future buyers. After all, most buyers want a high-performing business, one that isn’t reliant on the current owner – and most are prepared to pay a higher price, or make an offer with less conditions attached, with a strong management team.
4. Your eventual exit from the business will be much, much smoother. When you decide to take a step back from the business, there will be less risk of disruption because the business is used to functioning independently of you. For the buyer, this reduces the need for them to deploy or recruit their own management team. For your employees, it promotes stability and confidence during the handover. And for you, there’s peace of mind, knowing that the business you’ve spent so long building can continue to flourish.
Having put a great deal of your time and energy into the business, it’s only natural that you’ll one day want to take back some of your time and convert your success into personal wealth. Whether you want to exit the business next year, or many years down the line, doesn’t matter – it’s never too early to start thinking about your succession and exit planning.