What is operational succession?
Operational succession is the transfer of the capability to run a business out of one person’s head and into its systems, its people and its documents — and the documented proof that the transfer held in that person’s absence. The full definition.
How is that different from succession planning?
Most succession planning is paper succession: tax structure, valuation, shareholder agreements, wills and the sale process. It decides who will own the business. Operational succession decides whether the business will still run once that person stops running it. Owners need both; most only ever get the first.
What is owner dependency?
The degree to which a business relies on its owner to function. A business is owner-dependent when knowledge, relationships, authority or credentials it needs sit with one person and nowhere else. It is measured in six dimensions: operational, commercial, financial, decisional, relational and credentialed.
Why does owner dependency matter when selling a business?
Because buyers price risk, and a business that may falter when its owner leaves is a risk. It typically shows up in diligence as a lower price, an earn-out, a longer seller note or a requirement that the owner stay on — or as a deal that doesn’t close.
Can a business that depends on its owner still be sold?
Often, yes, but usually on worse terms, and sometimes not at all. The less it depends on the owner, the more options the owner has. More on selling an owner-dependent business.
How long does it take to make a business run without its owner?
Usually nine to eighteen months for the main work, and sometimes longer for items that depend on other people’s timetables, such as a second person qualifying for a trade licence. Because a buyer finds most issues in about ninety days of diligence, the work needs to start well before going to market.
What is the Three-Week Test?
The proof step. The owner is completely unreachable for three weeks while the business runs, and everything that happens is logged and signed. It is the evidence a buyer or lender can rely on. How it works.
What is the Check, and is it really free?
The Check is a fifteen-minute, eleven-question screen that scores how dependent a business is on its owner and shows the weakest area. It is free, it stays free, and you see your score immediately without giving an email address. Take the Check.
Who sees my Check answers?
Nobody can see them as yours. The online Check runs in your browser, and nothing that identifies you is sent anywhere unless you choose to send it with a message. If you send your result with a message, it is kept confidential and never shared with anyone else.
How much does Corefield charge?
Every owner-side engagement has a fixed fee agreed in writing before any work begins, set by the scope and the size of the business. There are no success fees, commissions or hourly billing on owner-side work. Fees are discussed on a short call once it’s clear what fits.
Does Corefield value businesses or give tax advice?
No. Corefield doesn’t value businesses; give tax, legal, accounting or investment advice; or broker sales. Those stay with your existing professionals, and Corefield refers anything in their area straight back to them.
What size of business does Corefield work with?
Paid work is usually a fit for businesses with roughly $1 million or more in revenue and at least three people besides the owner, whose owner wants options within one to five years. Smaller businesses can still take the free Check and will get an honest view of what to fix first.
What industries does Corefield work with?
Businesses that run on scheduled, skilled work: maintenance and field service, equipment service and repair, licensed trades, refrigeration and mechanical service, manufacturing and fabrication, marine service, food processing and cold chain, industrial distribution, and equipment dealers and rental.
Does Corefield ever buy the businesses it advises?
No. Corefield’s owner also owns a company that acquires businesses, and this is disclosed in every engagement letter. A business that has been a paid Corefield client is never acquired by that company, at any time, and nothing from a Corefield engagement is ever shared with it. Our commitments.
I’m already under a letter of intent. Can Corefield help?
Probably not in time. Once a letter of intent is signed, a buyer’s diligence will usually find operational issues before they can be fixed. The most useful calls to make are to your lawyer and a quality-of-earnings accountant. If you haven’t signed yet, it is worth a conversation.
I’m a broker or accountant. How do referrals work?
The client stays yours, in writing. Corefield works in six operating areas, refers everything else back, reports back to you, invoices the owner directly with no referral fees or splits, and never introduces another broker. For advisors.
Do I have to read the founder’s book?
No. Jay Karnni’s book The Quiet Gap is where the four-question method began, but nobody working with Corefield is expected to have read it.