6 predictors of business transfer success

You feel like all the right pieces are in place to transition your business. The time and situation feel right. You are ready to pull the trigger. Even so, you are held back by the feeling that, as Cameron O. Anderson, MBA, CMC, says, most successions can’t be labeled successful or unsuccessful but merely reasonably satisfactory.

So how can you feel confident about the success of your succession? Anderson recommends considering if you and your business’ prospective owner are on the same page with respect to these six elements:

1. Complementary management behavior based on psychologist Rensis Likert’s four styles of management: Exploitive-Authoritative, Benevolent-Authoritative, Consultative or Participative. Make sure to consider if the new owner will take a similar approach, or the transition could be rocky.
2.  Mutual respect. Did the deal come from a place of appreciation on both sides, or does it seem like one is in power and the other is in need?
3. Self-insight. Have you asked yourself why you are doing this and why this feels like the right person to buy your practice?
4. Understanding others’ needs. How will this change impact your staff and your clients?
5. Understanding organizational structure, authority and delegation. Do you know how the new owner will interact with staff, or if roles will change?
6. Sales, retention and growth competencies of the successor. Have you considered the long-term vision for the business rather than the short-term transition?

“It is truly not a perfect process,” Anderson said. “It takes effort and control over behaviors and a willingness to endure different opinions and approaches to compromise for the good of the business.”

See more in Anderson’s Round the Table story “The personal touch”

Choose your own adventure through succession with the MDRT Business Continuity Decision Tree.

Written by Matt Pais, MDRT Content Specialist