Do you want to do what you’re doing forever?
I’ve met some entrepreneurs who couldn’t be happier in their current roles.
They’re surrounded by a great team. They love owning the big picture vision of the company. They want things to go on…and on….and on.
I’ve met a lot of other entrepreneurs who love what they do…but don’t see themselves doing it forever.
For one reason or another, they want to step back from the business.
To sell the company for a payday.
To spend more time with family.
To pursue new ventures and build other businesses.
(most often, some combination of all of the above)
Right now, the idea of stepping away from your company might be a distant dream.
But it IS possible.
Jay Bacrania, one of our senior consultants, has helped several of our clients successfully make this transition in their companies.
Here’s Jay’s take on moving from employee to owner/investor.
If you’re an entrepreneur ready to step back from your company, it’s important that you create a smooth transition that ensures your team members feel respected.
Earning more freedom for yourself shouldn’t come at the cost of dumping responsibility on your employees—or abandoning them altogether.
Once you identify your desire for change, you can start to plan a respectful transition that empowers your team members instead of leaving them searching for answers. This principle is the foundation of a solid transition plan.
Your Job as Owner
As you start to consider the future, you’ll need to think through the roles and responsibilities you will hold onto inside your organization.
In most companies we work with, the owner and CEO are the same person. But if you’re going to move out of executive leadership and solely into the owner role, you’ll still retain a small set of core responsibilities.
Make sure your org chart clearly reflects your accountabilities as owner, as well as any other duties you plan to maintain inside the organization.
You’ll also need to revisit your compensation structure to make sure you’re treating your business fairly. Owner/CEO comp is broken into two parts:
- the money you make as an employee of the business for the work you do (as CEO, VP of Sales, or in other roles)
- the money you make as an owner of the business as a shareholder
Your employee compensation should be commensurate with what you would pay someone else to do your functions inside the business. Everything else is owner compensation.
If you plan to hire a CEO to take your place, for example, you’ll need to adjust your employee compensation to account for no longer owning that function in your company.
Ideally, you’re earning more profit, so as you adjust your compensation mix to more owner/shareholder comp, your total earnings stay the same (and grow over time!).
3 Keys to Success
The big risk here is acting like you’re out of the company before you’ve fully delegated your responsibilities away. That’s when things break, and your company can fall apart fast.
Your goal is to step away from your company, not turn your back on your business.
Three things that will help you step away successfully:
- Give your team a leader. Right now, the leader of the business is you. But if you leave, don’t expect your team to carry on without you. Every team needs a leader, no matter how good your people are. Ensure that the role of leader is filled by someone who understands the expectations for the position.
- Keep score. A scorecard is an owner’s best friend. Part of your ongoing role will be to course correct the organization if and when necessary. To do that, you need a quick and easy way to evaluate the state of the company. A scorecard helps you keep a finger on the pulse of the business.
- Build airtight processes. Before you truly step away, make sure that process documentation in your company is airtight. If your team needs you to supply all the answers, they won’t be able to function without you. If you’ve truly delegated your responsibilities away, the processes you build should help your team address 99% of the issues they face.
All three of these items are built into the fabric of a strong business operating system. An operating system (like our system, GROWTH) provides the clarity, visibility, and accountability you need to confidently remove yourself from your company’s day to day.
Eric here again. I want to remind you that transitioning out of the CEO role takes time and careful planning—but it is possible. It’s also not mandatory. Our goal isn’t to tell clients how to participate in their companies; it’s to make sure they have options.
If you’d like help transitioning your own role inside your company, set up a call with one of our consultants today.