One of the things we often miss in succession planning is that it should be gradual and thoughtful, with lots of sharing of information and knowledge, and perspective, so that it’s almost a non-event when it happens.Anne M. Mulcahy
Check Out These Highlights:
Being in business for over 20 years, I am busy running my business, and sometimes we business owners forget that our lengthy to-do lists will never compete!
As I am aging, I have thought about succession planning to either sell my business in the next decade or my kids choose to take it over. Either way, I need to infrastructurally as well as organizationally have a plan that allows me the opportunity to step aside and cash out.
Some interesting stats: 70% of business owners are looking to fund their retirement from the value of their business – yet only 2% know how much their business is worth. When the owner and their business have an actionable plan, it makes the business worth it no matter when the business owner leaves.
Exit And Succession Planning: Knowing Your Numbers With Christine Nicholson (EP. 94)
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My motivational quote today is by Anne Mulcahy. She said, “One of the things we often miss in succession planning is that it should be gradual and thoughtful, with lots of sharing of information, knowledge, and perspective, so that it is almost a non-event when it happens.” Being in business for over twenty years, I’m busy running my business. Sometimes, as business owners, we forget that our lengthy to-do lists are never going to be completed.
The other funny thing is as I’m aging, I have thought about succession planning to either sell my business in the next decade or if my kids choose to step into it. I will never force them to do that. Either way, I need to create the infrastructure organizationally and have a plan that I can follow that will ultimately allow me the opportunity to step aside and cash out.
About Christine Nicholson:
Christine and I are going to discuss the topic of generating real value that business owners can extract to fund a better retirement AND leave a thriving business for the next owners. It all starts with letting go.
Christine is a multi-award-winning professional business mentor with 40 years of experience. She has written 4 books, spoken at over 200 events, is qualified as an accountant, and has a law degree and a couple of other master’s degrees. I’ve saved businesses in different sectors THOUSANDS of pounds/dollars and helped owners increase the value of their business by MILLIONS.
How to Get in Touch With Christine Nicholson:
Christine and I are going to discuss the topic of generating real value that business owners can extract to fund a better retirement AND leave a thriving business for the next owners. It all starts with letting go.
Here are some interesting statistics that my guest shared. Seventy percent of business owners are looking to fund their retirement from the value of their business. Here is the scary thing. Only 2% know how much their business is worth. When the owner and their business have an actionable plan, it makes the business worth it. No matter when the business owner chooses to leave, there is an intrinsic value there.
Who is my guest? She is amazing. Her name is Christine Nicholson. We are going to discuss this topic of generating real value that business owners can extract to fund a better retirement, leave a thriving business for those next owners to step in, create their magic, and bring genius to the world. She is a multi-award-winning professional business mentor with 40 years of experience. She is my peer.
She has written four books and has spoken over 200 events. She is qualified as an accountant, has a law degree, and has a couple of other master’s degrees that we don’t even need to talk about. She is just brilliant. She saved businesses in different sectors thousands of pounds and dollars. She is in the UK. We are in the US. She helped owners increase the value of their businesses by millions. Please help me welcome the amazing and brilliant Christine to the show. Thanks for being on.
I don’t know how I can face up to that fantastic introduction. Thank you. It is a great quote as well.
I was driving to one of my clients in New Jersey. We have a lot of traffic. A song came on. Whatever show I was recording that week, I thought, “The lyrics on this song are spot on to set up the topic.” As I continue to sit in traffic, I’m like, “Why don’t you do that every week? You could find these cool quotes or lyrics that set up the tone of what the conversation is.” I have probably been doing that for about five years. It sets the tone. Doesn’t it, Christine?
Absolutely. When you think about leaving your business and your succession plan, you are preparing for the biggest sale of your life because you are not selling your product or services anymore. The number of times I hear business owners say, “My business is my baby.” First of all, your business is no baby. You have to get your head around it. If you want to think like that, then you are about to sell the biggest thing in your life. It is as precious to you as if you were selling your child. You need to do a lot of prep for that.
Biggest Leadership Mistake
We don’t do enough, myself as well. It was this a-ha moment during COVID like, “What do I do? Am I going to sell the business? Is it going to die in the vine? Do my kids want it?” You start going through these questions, especially as we age. What is the biggest leadership mistake you see in owner-managed businesses?
It is saying things like, “My business is my baby.” That is a common one. This is the big one, “I’m never leaving my business.” I want to be drinking whatever it is you are drinking that makes you believe that you are going to live forever because 100% of business owners leave their businesses. For more than half of them, it’s not when they plan it.
You might have a plan in your head which is the second best place to have it. The best place to have it is written down and shared with other people. Even if you got a plan in your head, I guarantee you that in the whole cosmic joke that is life, in more than 50% of the cases, something is going to come along and completely side-swipe you.
I always called this the four horsemen of the business apocalypse, which is ultimately death, disease, disability, and I always add divorce because most people don’t choose to get a divorce. It is something that happens to them. All of those four things can be devastating for your business and can cause you to leave or be distracted in some way.
Also, death and disability that you can no longer do it. I had a friend. Her husband was a business owner. He sold heavy equipment. He had cancer and was battling it. She kept saying, “What’s your sign-ins? We have to talk to the accountant. What is the succession plan?” He has a vehicle for him to carry the heavy equipment. He kept saying, “No, I’m going to beat this.” She didn’t want to put that courage down or push it down. On the same token, after he did pass away, she couldn’t find the title for the truck.
All of these simple things that had he had a folder even with the stuff in it and sign-ins. It was hard for her to turn those assets into cash and get sign-on to his different accounts. It was very time-consuming, and she is still mourning the death of her husband. You have all that emotion going on, plus you have to get rid of the equipment and all of those things. That is what we are talking about. We never know.
I always say, “If you love your family, think about these things so that they don’t have to.” Nobody likes to talk about what disaster might happen. Yet, we all buy insurance. There is a legal requirement, certainly in the UK, for a certain amount of insurance and public liability insurance. Quite a lot of the insurance we buy is voluntary.
We are recognizing, in some part of our psyche, the logical steps towards ensuring against unusual events. We don’t take that step to look at ourselves. If you think of the horrendous statistics, particularly around how many people are going to get cancer, and of those, how many people survive or don’t survive? If you look at disability, only 5% of all the disabled people in the world were born disabled. That means 95% of all disabled people have an acquired disability. Thinking that it will never happen to you is the same delusion as I’m never going to die.
If you love your family and if you love yourself, think about these things because we are talking about something that will take a couple of hours but relieve weeks, possibly months, and in some cases years of heartache when they could be celebrating your life instead of worrying about the fact that you haven’t left any income. You have left a whole mess up behind that they need to sort out. They are probably as worried about your workforce as you would have been if you had been around.
The Hardest Thing To Let Go For Business Owners
What is the hardest thing about letting go for business owners like the ones who say, “I’m going to do this forever?” No, you are not because you are going to die. Are there some commonalities that you see over and over that resonate with the audience?
The real common ones are if someone is saying, “I’m never going to leave my business.” What they are really saying is, “Nobody can do this the same way as I can. Nobody can do this as good as I can.” It is a delusion because once we go, we are dust within a few months. The world still goes around. There are always going to be people who can do elements of what you do and probably better. I always talk about doing $10, $100, $1,000, and $10,000 an hour of work. I always think, “Look at all that $10 inflation. It is probably $20 or $25 an hour now.”
If someone is saying, “I'm never going to leave my business,” what they’re really saying is, “Nobody can do this the same way or as well as I can.” It is a delusion because once we go, we are dust within a few months, and the world still goes… Share on XIf you think about people inputting data, you are not the only person who can do that. I know some people who can type a whole lot better than me. That is why I get them to do it. You get all that off your table. You are starting to build in some resilience to your business because you got somebody else doing it better, faster, and costing a whole lot less. You then start the next level up of what you do.
Ten thousand dollar an hour work is usually going and getting customers or building your sales pipeline with that personal relationship management or recruiting appropriate members of your team, making sure that your team is looked after, and then elevating them so they can make decisions. The common things about not letting go are, “If I’m here and I make all the decisions, at least I can feel like I’m controlling everything.” All you are doing is making your business worth less because if you go, nobody else can make decisions.
It is a tipping point in someone’s brain. It is like a little light bulb. They will wake up one day, and they will go, “ Now I get it.” They will let somebody else make 1 or 2 decisions and another two decisions. Before they know it, they are going on holiday without their phone. They are engaging with their family. When they come back, the business is doing even better. It does better without them. That is the dichotomy.
I have a client who said to me, “If I handle this over, what if they succeed?” I’m like, “That is a good thing.” He said, “I have been doing it for 25 years. They have been doing it for three years, and they’re doing it better than me.” I went, “Yes, but you did all of this. You started it. You pushed it. You built it. They have taken it from here. They didn’t take it from you.”
It is all about perspective. It is fascinating because, as a business owner, I finally hired a VA. I was like, “I don’t need a VA.” Now, I don’t know how I did without the VA, and I’m going to hire more with different expertise because I can hand things off at a much lower price point. Work is getting done around the clock because there is a 12-hour difference between me and my partner. She is down in the Philippines, so there is always work going on. When I come in, there are emails about the things she is working on. I’m sending it to her. She is working on it while I’m sleeping. It is such a great way to do business.
Once we learn something, as a business owner, what do we do? We tell our peeps. I can’t tell you the number of people that I have introduced to her that she has introduced. Now she has a VA agency that she is building. It is this whole energy that we can create. Once we realize in our silly minds, “I can hire someone to do that better than me. What am I waiting for?” We get in our own way. It goes back to the mindset. Our little brain is still our little brain.
It is that control. People think they are the ones making all the decisions and that they are in control. The way that works is your business is now controlling you. You are the slave and not the master. The secret of having the title business owner is ownership. Many people are like, “I can’t do that. I can’t take time off from my business.” This is an inanimate object. It is a piece of paper. It is a legal status, and you are letting it control you? You think you are the boss, but you are not letting go. You keep saying, “I can’t leave my staff on their own. They never survive without me.” Who is working for who here? You don’t think of it like that. You think you were nurturing them.
I heard this saying about lawnmower parents. I had never heard this before. I had heard of helicopter parents. It is a concept of lawnmower parents. If you think about it, a lawnmower is you push something that cuts down all the barriers in front of you. As a parent, what you are doing is you are not allowing your child to make any choices or risks because you are knocking all the barriers out of the way. I thought, “I can think of many business owners who are lawnmower leaders. I am using that in the future.” It is such a visual thing.
Adding Value To The Business
Think about the caterpillar and its chrysalis. For it to break through to become a butterfly, it has to fight, break down, and come out of it. They have done testing with this where they cut it to make it easier for the butterfly. The butterfly can’t fly because it didn’t build the muscles in the wings to be able for it to take flight. That is what we are doing with our kids and businesses. I am going to use that, Christine. That’s brilliant. I have another question. What are things that a business can change and that will add value? In addition to us getting out of our own way and all those things, are there things that we can do that can add value to the business?
I wrote my second book about this. I can sum it all up in one sentence. It is getting the right people doing the right things at the right time for the right reason and in the right roles. First of all, you got to get the right people in the right roles. That is identifying what those roles are. That includes identifying the role that you should be in.
As a business owner, you should be working at 30,000 feet complete helicopter view, big vision stuff, and letting everybody know what that vision is. Identify the right actual tasks that need to be done. If you got the right personalities and they understand what their big picture is, they don’t need to build it. They just need to see where they are going. They are released from not knowing. The minute they are in the know about where you are going, they can start making decisions about what is the right thing to do.
If you got the right people doing the right things and you built systems and processes around that, all of a sudden, there is a whole load of brain pressure that is coming off you because now you are not making decisions every fifteen seconds. Sometimes business owners are making the same decision every day. It feels like they are firefighting.
There is a good saying that I got off Designated Survivor. It is fairly early on in one of the episodes. The ex-president comes to the new president. He says, “I respect you, sir. I appreciate it if you give me a record.” He went, “Why?” “You are doing a pretty rubbish job, to be honest.” He thought he wasn’t doing bad. He said, “The biggest thing you are doing is you are reacting and not leading.”
If you are constantly reacting, you are not leading. That is your one job. Your one job as a business owner is to lead. Leading is not controlling. If you got systems and processes in place, you could have a different conversation with your staff. I always say, “When something goes wrong, we can come in and have a grownup conversation about what went wrong. You can identify what went wrong. Here we have a process. Where in the process did it go wrong?”
Your one job as a business owner is to lead. Leading is not controlling. Share on XThere are only two answers, “Here, wherever it was, or it wasn’t the process. I didn’t follow the process.” Step two, “Why didn’t you follow the process?” There are only two answers to that, “I wasn’t aware of the process, or I couldn’t be bothered.” Couldn’t be bothered meant to go and work elsewhere. “I didn’t know about the process or understand it” is a training issue, and you can deal with that.
We got a quick conversation about where it go wrong. If it was something wrong with the process, we can improve the process. If you weren’t aware of it, that is a training issue. You want to work elsewhere if you don’t care. That means that you get rid of the people who are not the right people. You are building into the solid platform of your business and the culture that you want to keep going, which is people who care.
I remember when I started my show, and every time I met someone like you, Christine, I would say, “I love you on my show. I will send you the link.” Before I even had a show application, I was like, “I will send you an email with everything I need.” I would write that same email over and over again. It was quick. As soon as we hung up, I did it. It was done and was off my to-do list. I never thought about you writing the same email over and over. Why don’t you put in a Google Doc and copy and paste it? It is the same thing.
Once I got a little more efficient with technology, I created a show application. We are being very simple here. That is one thing where I was getting caught up and wasting an hour and a half a week. An hour and a half, as a business owner, is a lot of time. People would send me all information in different formats. I had to review it and figure out what they were saying. In the application, I copy pasted it into my notes, and I’m ready to go. Those little systems were little quick fixes that took me five minutes to set up versus spending an hour and a half a week. That is just one silly example, but that is what we are talking about.
I always get my clients to look at their diaries and say, “Tell me what you are doing over and over again. If you are doing it over and over again, you can get someone else to do that. Get someone else to create the little process.” I have an assistant now. For years, I have been on my own and resisted having an assistant because I always thought, “That is somebody else I got to look after. It takes a lot of time to look after myself.” I have run big businesses with hundreds of employees before. I don’t want to do that again.
Now, I’m the same as you. I was like, “I don’t know what I would do without her.” I had been resisting asking her to do certain things because they were the things that I didn’t like doing. When I had my review with her, I said, “We have been together for six months now. Tell me what is the best thing that you do. What is the thing that if you know you got to do it now, you think, “Yes, I can’t wait to do that.’”
She said, “I love researching.” I’m like, “I hate researching.” She said, “I love the processes, improving the processes, and putting the processes together.” I’m like, “If you wake up on a day and it turns out to be a bad day, what does that look like?” She said, “It is when I find something that hasn’t got a process.” I said, “What’s the next worst thing?” She said, “When we have got a process, and you haven’t followed it.” I thought, “That’s me told.”
I will share another quick story with my VA because it is worth it. I have quarterly reviews with her. Not because she is doing anything wrong. She is amazing. It is exactly what you said. It is so funny. I tell her, “Make a list of all of the tasks that you’re doing. How long each task takes?” I need to hire another VA to do some of these more mindless tasks. She is good. I want her to do more of the research and creative stuff. The other thing I said is, “Tell me on a scale of 1 to 10 how much you love that task and how much you don’t like it. One, I didn’t love it. Ten, I love this task.”
There are certain things that she said she loves doing. I go, “You do?” She goes, “I hate doing that. It is yours. You will own it. You are the boss of it. Report to me now.” This is the second piece of this puzzle. We do that quarterly. In October 2021, I had the flu. I never get sick. Knock on wood as I say that. I was in bed for about two weeks. I couldn’t get out of bed.
No one knew I was sick. She ran everything. We had systems in place. She knew what deadlines I had. She knew what emails had to go out. She checked my emails and responded. Everybody thought it was me. That is the kind of power we can bring into our lives. First of all, it is exactly what you said. Stop and think, “What can I hand off? What can I delegate? Can I train them? Can they do it? Is it something I need to do?” You have to go through that thought process and create those systems. It’s amazing.
I had four weeks in the States in June. In all of that, I had a couple of volunteer boards, committee meetings, and client sessions because it was inconvenient to reschedule them, but nobody knew I was away. My client’s things were early in the morning. It’s not super early, but it still meant that I was out climbing mountains by 10:00 in the morning.
What it has made me realize is that because of my assistant, I can now work from anywhere. I’m proud of something. This is my mobile office. Everything fits into this. I took that away with me to the States for four weeks, and I ran my entire business out of this tiny little pouch because it had my electronic notebook, iPad, and a flat keyboard. The only other thing that is in there that weighs the most is my charger. I was in two different places where they had two different types of sockets. I had to take two different adapters. That was it.
For those tuning in, Christine showed a black zip on the top pouch almost. It is smaller than a briefcase. It was 8×11 and maybe 4 inches thick.
The thickness is only to do with the fact that I got this charger.
Succession Planning
It is a good time to be a business owner because we can flourish from anywhere unless I’m brick and mortar where I’m the baker or I’m creating something. We are out of time, but I do want to ask one more question. I know that you asked seven questions to every client. I think this will help business owners that are tuning in to start to get their heads wrapped around what this path looks like or what the possible solution is to succession planning. Is that okay?
There are seven questions, and the second book I wrote is all about these seven questions. The first thing is, do you have a strategic plan that you share? First of all, do you have one? The second one is, do you have systems in place that are effective and that can be shared and trained for your people? Do you have the right people on board? Do you understand cashflow in your business and how that flows through your business? Do you know your numbers? What is your relationship with your business? The final one is the devastating one. What impact does all of this have on you and your family?
I have a quiz that you can go and ask those seven questions. The links are both on my website. The first one is to ask those seven questions, which is the starting point for building a business that is more resilient. The second quiz is to get exit ready. It is specifically about being prepared for you not being in your business, no matter what that looks like.
Be prepared for you not being in your business, no matter what that looks like. Share on XI have to be honest. In the first ten years of business, I was like, “When I leave, I leave.” A business owner who was maybe ten years ahead of me said to me, “Sell it.” I go, “What am I going to sell? The business is me.” He said, “Don’t you have content that you create? Don’t you have a list? There is value in that versus letting it die.” It goes back to my Communication Style Assessment. We have blind spots. You don’t know what you don’t know. We are sharing this vital information. We have a quiz. You have your website.
These are resources for people to go, “Don’t beat yourself up. We don’t know things.” That’s why you are tuning in to the show. That is why I have amazing guests like Christine to shine a light for us to say, “There is a quiz. These are the seven things I need to think about. I could do that.” You are now taking a step forward in preparing for your own future. Hopefully, it will cash out and add it to retirement, like our intro, or you are keeping angst out of your loved ones’ lives because you have done all the planning in advance. I love those seven questions. It is remarkable.
This is the one thing I always say to people. You might think your business is worth nothing, but you have fought very hard to get every customer. That energy has gone into building your business. You fought hard to get the right people in your team and build them as a team. That has value. You are taking customers plus staff, and creating this whole that is your business. You are minusing from the value of your business by the way that you behave, which equals the value of your business. If you take yourself out, you are taking out the minus, which means you’re increasing the value of your business.
It’s simple. I hope everybody listens because that was an a-ha moment. You said that before and I thought, “If we take Connie’s monkey mind out of the equation, I can add value with?” We are business owners. We are a little bit egocentric. My ego is not too big, but it is a little bit because I have a business. I think, “The business couldn’t go on without me.” After talking to Christine, it was like, “You took me out of that equation. No minuses in my world.”
Thank you so much. I do want to share with everyone that if you are a business owner, even if you are starting out, you are in an even more powerful position because you are learning things that I didn’t learn until I was in business for about ten years. Fast forward everything for yourself, but check out Christine’s website. It is BusinessMentorUK.com. Email Christine at Christine@ChristineNicholson.co.uk. The free gift is GetExitReady.co.uk. Don’t worry, everyone. I will put all of that cool information so that you can connect with Christine however works for you.
Thank you so much for being on. I love your energy and brilliance. Before we start the show, I want to share it with everybody. She is an accountant and an attorney. She got a bazillion degrees. She has a business. She is brilliant. All of those credentials, her law and accounting degree, even though you chose not to do them as careers, the logic and the thinking is what you bring to the table. For succession planning, we do need that attorney and CPA mentality.
I know you bring those folks to the table depending on what country you are working in because laws are different. You have the thought process when you bring these other experts to the table. They are not pulling any wool over your eyes because you have that depth of knowledge, background, and education which is amazing. That’s why I think what you are doing is needed. The way you do it is awesome. Thank you so much for coming on and sharing your zone of genius with us.
Thank you. I appreciate the opportunity to speak to your amazing audience. If you don’t know that you don’t know, you can’t do anything about it. Knowing is only the start of it. The real genius is in taking action. Those are the people who take action, even if you do one thing. There are loads of stuff on my website where you can do one thing. It will cost you nothing except a short period of time.
If you don't know that you don't know, you can't do anything about it. Knowing is only the start. The real genius is in taking action. Share on XEverybody, please go to the website. Take the quiz. Explore the website because it will start to get you thinking. It will shine lights on the blind spots. It will create even better questions so that when you connect with Christine, you are moving fast. You can move that needle and put things in place quickly. Christine, thank you again. It is a true joy. You have given me so much as a business owner to think about. Thank you so much. This was a great show.
Thank you.
I hope you will join me weekly as we question, build, and discover together. Between my guests and me, and our zones of genius, stories, examples, strategies, and tips, do something with the information. It is what Christine said. I’m going to paraphrase it, but information is a beautiful thing. If you do nothing with it, it is just information. It becomes powerless. When you put that information into action, that is where the reaction happens, and where magic starts happening. Take some of the advice and ideas that Christine shared. Go to the website. Explore and challenge yourself, but put something into action. Take that one little baby step. That’s all that’s required.
Thank you again, Christine. Thank you all for joining me. As always, I’m honored to have you on this journey. I do hope that this conversation gets you thinking. I hate when we leave money on the table in sales. Don’t leave money on the table when you are forced to exit your business. Get into a proactive position to choose the path of profit as you exit your business. Thanks again for tuning in. Thank you again, my amazing guest, Christine. I will see you all in the next episode. Have a great one.
Important Links
- Communications Style Assessment
- Christine Nicholson – LinkedIn
- BusinessMentorUK.com
- Christine@ChristineNicholson.co.uk
- GetExitReady.co.uk
- https://LinkTr.ee/conniewhitman
- https://ChangingTheSalesGame.mykajabi.com/All-Star-Community
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