The Unknown Known about Women Owners’ Succession
by Chia-Li Chien | Jul. 14, 2014
“You think you know, but you really don’t know?” said Donald Rumsfeld, past U.S. secretary of defense in a documentary film The Unknown Known.
My experience tells me that privately-held business owners want to have a successful cash out event regardless to whom they sell. Yet to create a win-win situation for both buyer and seller there are some timing characters to be aligned according to Slee (2009):
• Business Timing: Does the business has a solid key management team that can operate with or without the owner or founder.
• Economic Timing: Where is the economic cycle and its related Industry trending in Market M&A (Merger and Acquisition) movement (not performance), see detail of Slee (2007).
• Personal timing of the owner: the readiness for owners to move on to something else more or less challenging?
One of the best “business growth predictor involves considerable planning” according to the research paper from Manolova, Brush, Edelman, & Shaver (2012). This research also found that most business don’t grow rapidly. Instead most business grow overtime in sales, employees, and market share, etc. This is due to owner’s desire to be in “survival mode” instead of desire to take his/her business to “next level.” Imaging someone you know who lives paycheck to paycheck, you probability won’t see him/her saving for anything because he/she has to get by and to survive. Planning for tomorrow just has not cross his/her mind as a concept. He or she has high tension focus on just to survive. To be in the “survival mode” cycle can be very long depends on one’s circumstances.
Another research paper of Brush (1992), found that women owners tend to integrate her business (or business relationship) into her life. Men owners tend focus on one thing – economic goals. Women owners however focus on both economic and social goals. No wonder women owners is better at conflict or chaos management. Just like multitasking, you juggle and juggle a lot. Considerable planning takes time and focus from women owners regardless how much you juggle.
Recently, I was referred to Judy who has been successful in her multimillion dollar international company. She knows her market share is growing base on her well-built network, connection and many industry indicators. She also knows that what she needs to focus on one core competency to continue building the competitive edge. However, she felt short on her financial. She knows her business is profitable but does not know there is limited cash flow. You see, profits in business is like food. Cash is like oxygen. Human can go without food for about three days probability would be OK. But human can’t go behind 10-miniutes without oxygen, you die. When the cash flow is tight, your every move of investing in your business growth gets delay and further put you off the competitive edge. The longer you stay in this cycle, the less business equity value you have.
The less business equity value you have, the less probable for owners to do “considerable planning” of any kind. Perhaps you think you know “why” you’re in business for? But do you really know what you don’t know? Left along how to eventually realize your desired outcome. A good planning starts with knowing where you are today and where you are going in the next 3 to 5 years.
Every business owner plays with his/her timing every step of the growth of his/her business. You watch the economic timing closely to be agile to compete, to innovate and to meet the market needs. Don’t fall short on your business timing and personal timing. You might be more wisdom as you age gracefully. You may not take back the time that you missed in planning and implementation. So you think you know about business succession but I challenge you to think again.
You can get an easy-to-follow “considerable planning” for your business succession. I would love to hear how you envision life after maximizing your business’s equity value. And, I would love to help make it a reality for you. Contact me at email@example.com or 704-268-9378 .
Manolova, T. S., Brush, C. G., Edelman, L. F., & Shaver, K. G. (2012). One size does not fit all: Entrepreneurial expectancies and growth intentions of US women and men nascent entrepreneurs. Entrepreneurship & Regional Development, 24(1/2), 7-27. doi:10.
Brush, C. G. (1992). Research on Women Business Owners: Past Trends, a New Perspective and Future Directions. Entrepreneurship: Theory & Practice, 16(4), 5-30.
Morris, E. (Producer). (2013). The Unknown Known. USA: Participant Media, LLC.
Slee, Robert T. 2009. Midas Marketing, how Midas managers make markets. Charlotte, NC: Burn the Boats Press.
Slee, Robert T. 2007. Midas Managers, how every business they touch turns to gold. Charlotte, NC: Burn the Boats Press.
About Chia-Li Chien
Chia-Li Chien, CFP®, CRPC, PMP; Chia-Li “like JOLLY,” Succession Strategist of Value Growth Institute, dedicated to helping private business owners increase their company equity value. She is the award-winning author of the books Show Me The Money and Work toward Reward and a faculty of the American Management Association. Her blog and newsletter was named a Top Small Business Resource by the New York Times You’re the Boss blog. Contact her at firstname.lastname@example.org or (704) 268-9378 .