Move guide
Take the business off the owner
Your report suggested a move on at least one of these two questions:
- whether the business runs without the owner;
- whether there is a team a buyer would back, and a plan for the owner's exit.
This move guide hands every decision and customer relationship the owner holds to a named person. Then the business runs a full quarter without the owner, and records the numbers.
1. When it applies
Use this move guide if your report placed either question at "Red flag" or "Doubtful".
| Question | Where it may sit today | Where this move guide aims |
|---|---|---|
| Does the business run without the owner? | Red flag: "Every price, hire, key customer and bank conversation goes through the owner, and the business slows the week they are away." Doubtful: "A second layer exists on the chart; in practice decisions wait, and the largest customers deal only with the owner." |
Supported: "The business has run a full quarter with the owner absent from day-to-day decisions and customers, and hit its numbers." |
| Is there a management team a buyer would back, and a plan for the owner's exit? | Red flag: "There is no management team, only the owner and long-serving staff; the question of who runs it after a sale has not been asked." Doubtful: "Managers exist but a buyer would not back them: no P&L ownership, no track record of their own, and no view on who stays." |
Supported: "The team has run the plan with real P&L accountability, retention and incentive terms are agreed, and the owner's handover is scoped and dated." |
If both already sit at "Supported" or higher, skip this move guide.
A "Red flag" on whether the business runs without the owner caps the report's verdict at "Slow down". Start this move guide early: the test quarter is the proof, and it cannot be hurried.
2. What to do
Five steps, over six to twelve months.
- Write down every decision the owner makes and every customer relationship the owner holds. Give each one to a named person. Table A below records it.
- Name the successor or the team. Give them real profit-and-loss accountability now.
- Run one full quarter with the owner out of day-to-day decisions and away from customers. Record the numbers from that quarter.
- Agree retention and incentive terms that survive a change of owner.
- Scope and date the owner's handover, before a buyer asks who runs the business.
3. What to produce
One table.
Table A. The owner handover log
| Decision or relationship | Held by the owner today | New holder (name) | Handed over on | Working without the owner? |
|---|---|---|---|---|
A row with no date in the fourth column is a plan, not a handover.
4. A worked example
Illustrative. Written for this move guide. It describes no client.
An engineering services firm has forty staff. Its founder signs every quote above a set amount and holds the ten largest client relationships.
The handover.
- The log listed fourteen decisions and ten relationships. The operations manager took the quotes. Two senior engineers took five clients each.
- The founder introduced each engineer to the client in person, then stepped back.
The test quarter.
- For one quarter the founder took no client calls and signed nothing. Revenue held and one client renewed.
The terms.
- The operations manager and the two engineers got retention payments due a year after any sale.
Six months on.
- 14 decisions handed to named people
- 10 of 10 largest clients with a new holder
- 1 full quarter run without the founder
On a retake, both questions could be answered at "Supported".
What it looked like in our work
From our own work. Redrawn.
For a buyer of an industrial manufacturer, our due diligence named the key-person risk, why it existed, and what the buyer should do about it.
- The riskLosing the largest wholesale customers as the business changes hands.
- Why it existedSelling ran on personal relationships, the largest customers decided centrally, and two people managed every national account.
- The effectLost share and revenue with the largest customers.
- What the buyer should doRetain or contract the key people before completion, and set a period to hand the relationships over.
A seller can do what the last card says before a buyer asks.
5. Effort and dependencies
- The ownerHands over every decision and relationship, and stays out for the test quarter.
- Successor or teamTakes profit-and-loss accountability now.
- BoardAgrees the retention and incentive terms.
What you need
- The buyer map from knowing who buys and why.
- A full list of what only the owner does.
How long
- Six to twelve months. The test quarter is the proof, so start it early.
What gets in the way. We have seen this in our own work:
- Two people held the accounts. In an industrial manufacturer we looked at, two employees held every national account. The buyer counted that as key-person risk, and priced it.
6. How will you know it worked?
The test is whether the business hit its numbers in the quarter the owner stayed out. Retake the check after the test quarter. Each of these should be true when you answer:
| Question | You can answer Supported when | A document alone does not count if |
|---|---|---|
| Whether the business runs without the owner | The business has run a full quarter with the owner out of day-to-day decisions and away from customers, and hit its numbers. | The owner is named as stepping back, but still signs the large quotes. |
| Whether there is a team a buyer would back | The team has run the plan with real accountability, its retention terms are agreed, and the owner's handover is dated. | The successor is named, with no budget or customers of their own. |
The worked example is illustrative.
Think we've used your work without proper credit? Tell us and we'll fix it.