The desire to see the business we have built from scratch or inherited from our parents continue beyond our ownership is one of the most prevalent emotions among owners of successful businesses. Many owners go to great lengths to give their employees the opportunity to succeed them in the ownership of the business.
Employees and Owners Are Cut from Different Molds
Unfortunately, these owners do not always take into account that there are major differences in the personality and motivations of owners and employees. It is a very small percentage of people who work as employees that ever step into the role of owner and entrepreneur. It takes a high degree of self-motivation and a willingness to accept risk to make that jump. That doesn’t mean that there aren’t some employees who can make the transformation. However, owners should be very careful, calculating the traits that are essential for someone succeeding them, then measure their employees to see if they match up.
A Case History – The Mining Company
The owner of this business had built a large, rapidly growing mineral extraction business. The owner was very dynamic. He combined an excellent grasp of the operational requirements of his industry with a well-honed sense for deal doing. He had built his business by acquiring under performing assets from corporate sellers and turning them around with much leaner overhead structures. As he grew his company, he built an impressive team of bright, professional managers. At the height of his success, this owner went through a re-evaluation of his own objectives. He decided to sell the business. While he could have found a buyer on the outside, it was his great desire to see his management team step into his shoes. He totally arranged the transaction; getting appraisals, placing financing that did not overly strap the company and setting his managers up with the proper representation.
So far, this sounds like a great story right? How do you think it turns out?