The importance of your management team in the future of your business

Whether you’re considering selling your business ahead of retirement, or want to attract investors to fund the next stage of growth, a strong management team is essential. In this article, we look at the value of your management team when you’re preparing for the next chapter – and how to build a team you trust.

The value of your management team in attracting a buyer

One of the main drawbacks for buyers looking to acquire owner-managed businesses is when the owner is intrinsic to the success of the business. Consequently, many buyers may fear that the business would not survive without the continued daily involvement of the owner.

Having a strong management team in place overcomes this issue, as is knowing that relationships with key customers and suppliers will continue no matter who is in charge. It gives potential buyers confidence that the business can ‘stand on its own two feet’ after you have left.

Of course, a strong management team also opens up the option of a management buyout. This means that the future of your business will be in the hands of the people you trust the most.

The value of your management team in attracting investors

If you’re looking for investment for growth, the strength of your management team can be make or break.

Investors will want to see that a solid management team is in place to carry the business forward and achieve the required growth. Central to this is ensuring that the business is not dependent on just one or two key individuals because there would be jeopardy if they were to leave.

The value of your management team in continuing your legacy

When you have built and mentored a capable team, you can sell, retire or prepare for the next stage of growth with confidence, knowing that your vision will continue to guide the business’s future.

Planning for succession

For all these reasons and more, the strength of your management team is a crucial part of succession planning. It’s an area that many businesses neglect. Research suggests only 30% of UK businesses recognise the importance of succession planning and fewer than one in ten have integrated succession planning into their strategy.

Yet having a strong and able management team in place helps minimise disruption to the business if people leave, whether expectedly or unexpectedly. It also puts it on a firm footing for the future.

To build the team you need, use your insight and expertise to make informed decisions and implement effective processes to make sure the right individuals are continually placed in the right roles.

Unlocking success tomorrow – and today

When you have the right management team in place, your business is in safe hands when you’re ready to sell or retire. It’s also equipped for growth now, which can only be good news!