Marcus Aurelius is widely considered a great emperor who also takes a lot of the blame for the fall of Rome.
While he did great things for the empire when he was alive, his biggest failure was his succession planning for the empire.
Marcus Aurelius was the last of the Five Good Emperors of Rome, a series of emperors who were very careful to choose a successor who would continue to do what was best for the empire.
Marcus Aurelius broke that tradition by choosing his son, Commodus, to succeed him. Commodus is widely considered to have been a terrible emperor.
Of course, we can’t place all the blame on either Marcus Aurelius, nor Commodus, for the fall of an entire empire, but the reign of Commodus is generally considered to be the start of the decline of the Roman Empire.
So, if you want your business to outlive you, you need to be very intentional about who takes the reigns once you step down.
This is not to say you can’t choose your son or daughter to take the reigns from you, but you have to make sure you’re not giving them your business just because you raised them. It should be because they’re the best person for the job … and that they want the job.
With that in mind, let’s take a look at some things you can do to ensure you’re not choosing your version of Commodus to take your place at the head of the company.
How Do You Want to Retire?
The first thing you need to determine is what you want your exit to look like.
Do you want to head to the beach as soon as the sale is finalized?
Or do you want to sell and stick around for a while?
The answer to this question will have a significant impact on determining how you sell your financial services firm, and to whom.
Selling Your Financial Services Firm to an Employee
A lot of business owners end up selling their company to an employee. That employee might also be their son or daughter, or it could be someone who has worked at the company so long they know the ins and outs of the whole business and they’re ready to take the lead.
But don’t assume you’ll go this route, especially if you don’t already have someone you want as your successor. You might think you have someone picked out, only to realize they are either unable or unwilling to take the helm.
You know better than anyone the responsibilities that come with owning a business. Not everyone is ready to shoulder that burden.
Mergers & Acquisitions
If you can’t find someone internally who is interested in buying you out, you might want to start looking for other financial services firms who are looking to grow and are interested in either acquiring your business or merging their firm with yours.
The M&A route can be lucrative, but it can also be tricky to navigate because you often end up combining forces with a company that was a competitor until you decided to merge.
This usually means combining teams that have become accustomed to different workplace cultures and might have different values.
It can be hard to feel good about handing your clients over to someone who doesn’t work the way you work or hold the same values you hold. So, if you do decide to merge your financial services firm with another, be careful when choosing your new partner. Do your due diligence beforehand to make sure it’s a good fit for everyone.
Do You Want to Retire When You Sell?
You might think selling your business means you retire once the sale is complete, and many business owners do go that route, but it’s important to know that’s not the only option available to you.
More and more business owners are choosing to sell their business before they’re ready to retire. Then they stay on – either as an employee or as a consultant – until they are ready to retire.
This option provides several benefits, including the fact that you don’t have to worry about selling your business at just the right time. If you’re not yet ready to hang up your hat, but you want to make sure your business is in good hands before you leave for good, the sell-and-stay option might be for you.
Just make sure before you sell the business that this is what you want. Then make sure the buyer knows this is what you want so you can include the terms of your stay at the company in the M&A agreement.
If you want to leave as soon as the sale is finished, make sure you’re clear on that as well. Some buyers might expect you to stay on for a while to help with the transition, so regardless of how you want to exit your business, make sure you’ve made that decision (and made it clear to everyone involved) before you start looking for a buyer.
The Vertex Option
One of the advantages of partnering with Vertex is we make succession planning easy.
When you partner with us, not only do you get a great team to support you as you continue to work to help your clients, but we also help with the transition process when you’re ready to exit stage left.
If you have an employee who is ready and willing to take the reigns, we can assist in that transition.
If you don’t have someone on your team who wants to take over, we can work with one or more of our other affiliates to make sure your clients will continue to get the great financial services they got from you. Our partnership will enable us to make the transition as smooth as possible because you will already be familiar with our culture and our process.
If you want to know more about partnering with Vertex, all that information is here.
