You Don't Get to Choose When the Business Has to Run Without You

Most exit planning starts with the assumption that the owner gets to choose the moment. You decide when you're ready to retire, spend a few years getting the business prepared, find the right buyer or successor, then gradually step back on a timetable that works for you.

It is a logical way to think about succession, but it isn't always how business ownership works.

Recent Australian research found that around 40% of small business owners surveyed had previously experienced a sudden, unplanned exit from a business. The reasons included health problems, financial pressure, burnout and unexpected market changes.

These weren't owners who carefully chose the right time to leave, rather circumstances made the decision for them.

The same research found that nearly one in three owners expect to retire within the next five years, while only 16% have a documented succession plan. Those statistics are concerning, but I think they point to something broader than whether an owner has written an exit plan.

The real question is "whether the business can cope when the owner doesn't get to choose the timing."

Imagine that tomorrow you were unexpectedly unavailable for six weeks. Not a holiday where you still check emails each morning and answer the occasional call. You genuinely couldn't be involved. No laptop, no phone and no quick message to say, "Send it through and I'll sort it out."

Most established businesses would probably continue operating. Staff would still turn up, invoices would still be sent and customers would still call. But that isn't really the test.

The more revealing question is what would begin to deteriorate.

Perhaps quoting becomes slower because unusual pricing decisions normally come back to you. A major customer becomes frustrated because you're the person they trust when something goes wrong. Cash becomes tighter because nobody else really understands the timing of the next eight weeks. Managers become hesitant because they have responsibility for their areas but have never been given the authority to make the difficult calls.

None of these things necessarily brings the business to a halt. More often, they gradually expose all the places where the business still relies on knowledge, judgment and relationships that sit primarily with the owner.

That is why I increasingly think we need to separate succession planning from owner independence.

Succession is about what eventually happens to the business. Owner independence is about whether the business is capable of operating effectively without the owner's constant involvement today.

You may have no intention of selling for another ten years. You may never sell at all. But there is still value in knowing that your managers can make decisions, your key customers have relationships with people other than you, important knowledge exists somewhere other than your head, and the business doesn't lose momentum simply because you aren't available.

That capability gives an owner something far more immediate than an exit plan. It gives them resilience.

It also changes the quality of ownership. A proper holiday becomes possible without monitoring the phone every few hours. Managers can actually 'manage' rather than continually seeking approval. The owner can spend more time thinking about where the business is going instead of remaining the person who resolves every problem.

And if the day eventually comes when you do want to sell, transition the business to family or bring in professional management, much of the difficult work has already been done.

The aim isn't to make the owner irrelevant

In most good businesses, the owner's experience and judgment remain enormously valuable.

The aim is to make their involvement a choice rather than a requirement.

There is a big difference between working in your business because you still enjoy contributing to it and working in it because you're frightened about what will happen if you stop.

Perhaps that is the more useful test of exit readiness.

Not, "When do I plan to leave?"

But, "What happens if tomorrow the business has to run without me?"

If six weeks without you would materially damage the company, that isn't only a retirement or succession problem waiting somewhere in the future.

It is a risk sitting inside the business today.

☞ Take the Exit Readiness Assessment to see where your business actually stands, before circumstances decide the timing for you.