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3 Ways To Think About Legacy In Your Business - Exit Planning

Posted by Josh Patrick

legacy planningMany business owners are concerned about their personal legacy when it comes to who will be the next owners of their business.  Some transfer methods help business owners build this legacy and others have a tendency to remove any attachment or legacy to the former owner relatively quickly.

If you own a business and are concerned about your legacy as it relates to your business you might want to plan for one transfer method over another.  Here are some things you can think about as you ponder who will be the next owner of your business:

If legacy is important selling to a third party or outsider is not a good idea. 

The vast majority of businesses that are sold to third parties lose their culture and as a result the legacy of the former owners relatively quickly.  A buyer is most likely interested in transferring the culture to the culture in the buying company as quickly as possible.  They will want to institute their systems quickly to help integrate your company into theirs.

If you plan to sell your business to a manager, legacy is possible. 

Selling to a manager gives you a better chance of keeping your legacy attached to the business, but there has to be some work done to make this a reality.  I believe that managers will tend to keep a business running in a similar manner the founder had, at least for a while.  As time goes on, the business will likely take on the personality of the new owners.  As a result, there is often a shelf life for how long a business legacy will last when transferring ownership to managers.

If you transfer your business to children, there is a good probability legacy can be preserved. 

If you transfer your business to your children, there is a chance for you to preserve both culture and legacy.  Using the concept of mentors and elders can keep both company and family stories alive.  It’s the stories that often teach people about what has made your company unique.

When these stories are told at family gatherings and passed down from generations, there often are standards for “how things are done around here.”  This is more likely to be important for family members than for either managers or certainly an outside buyer.  It’s the way things are done around here that keeps a culture strong and a legacy alive.

What are your thoughts about legacy and your business?  Is this something that is important to you?

Josh Patrick

Access your complementary Exit Planning Assessment.  This includes a coaching call on eighteen key areas a buyer would look at in your business.  You will have a call with no charge as well as a report that outlines a projected value of your business, the gap you could fill and strong and weak parts of your business.  Click on the button below to start the Exit Planning Assessment process.

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Topics: exit planning, business exit planning, Legacy Planning, exit readiness

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