I have probably discussed this elsewhere, but one of the best interviews I’ve ever listened to on exit planning was between Dr. Jeffrey Cornwall and Paula Lovell, Founder and CEO of Lovell Communications. You can listen to the short discussion on Jeff’s website at The Entrepreneurial Mind.
My first impression during the opening minute of this interview is that Paula looks so young, yet she has the wisdom to be planning the next season of her life.
Key Takeaways from Paula Lovell Interview
I liked Paula’s open-mindedness on seeking advice about how to approach her own exit in the business she founded.
She prefers the go-it-slow approach. But Dr. Cornwall recommends the band-aid method–pull it off quickly.
My favorite part of the interview occurred near the end. She is selling the business to her employees. And Paula has already hired a President. How many founders are able to pull this off at such a young age? Very few.
Pearls of Wisdom from an Exit Planning Expert
As I was listening to the interview, I couldn’t help but to think of Jane Johnson, who is one of the nation’s thought leaders in small business succession planning.
Jane was the first CFO I ever met whose primary work was helping CEOs to navigate the tricky maze of business exits. And her clients love her.
Jane and I provided feedback to a well-known Columbia, Missouri business owner several years ago, and I was taken back by her expertise and strategic mindset with respect to business exits.
During this process, I learned no fewer than four valuable lessons in succession planning. Here they are in Jane’s own words:
1. “Start the planning early and never step away from the company without having a formal and documented ownership transition unless you are financially secure without the equity in the business.”
2. “Conduct annual, individual conversations with each child whether they work in the business or not to be sure that everyone knows what the long-term plan is for the ownership of the company. A great book that guides this conversation is Every Family’s Business by Thomas Deans. This will ensure that everyone is on the same page.”
3. “Groom the next CEO for quite some time before leaving the company, whether they are related or not. Have a formal and written succession plan to accomplish this. Leaders are not born overnight and it is important that the employees respect and believe in the next CEO.”
4. “Don’t just give the business to anyone, family or not. Make them pay for it. Most people don’t value what they don’t pay for.”
Listening to this interview should be a requirement for every business owner even thinking about exiting his or her business. Paula is open about her concerns regarding her journey down this road. Her perspective is refreshing because she’s not afraid to say it’s not easy to let go.
I Am No Expert, But …
Exit planning? I know the basics. I know how to guide a business owner in building long-term value making the exit much easier should he/she want to sell the business to a strategic owner or private equity group.
What I can’t do is change an owner mindset that is enslaved to the business they created.
This inadvertent entrapment is generally not about money. Instead, it’s caused by lack of interests outside the business. At least that’s been my experience with working with business founders over the years.
The solution? Look around. Find people that need help using the talents, skills, and abilities you have. That will lead to a new mission, a new purpose in the next season of life.
And that’s precisely what several of my peers have done once they exited their family businesses. Tim Fawcett did that after he sold his family business that had been around for 75 years. Today, Tim helps other business owners navigate the exit and succession planning process in and around New Brunswick, Canada.
In short, start planning now as Jane suggests.
But keep in mind there are actually two plans. One is for exiting. The second is for making that next season of life a hero’s journey of great and memorable achievements for you and others around you.
Paula, let us know if you need Jane’s phone number. You would make a great exit planning coach down the road.