Scot Hunsaker knows firsthand what many business owners don’t: If you plan to sell your business at 65, you should be devising an exit strategy at 50.
While some have said five years is enough to begin preparing a company for succession, the transition comes much more smoothly if done over 10 years or more, said the former owner of aquatics powerhouse Counsilman-Hunsaker.
This especially holds true for companies operating in service-oriented fields such as aquatics, because their value often comes from institutional knowledge and personal reputations, as opposed to factory floors and machinery.
Hunsaker has written a book, Heroic Ownership, to help guide business owners through the process of building a team that can continue the company’s legacy.
Hunsaker earned a business degree from Indiana University, then worked in banking and computer/technology ventures before joining the company founded in part by his father, Joe Hunsaker. He purchased the firm in 1999, then set about growing it from a small family business to one that boasted four locations across the U.S., clients in 50 states and Canada, a payroll that had expanded threefold. Over the course of several years, Hunsaker graduated more than a dozen employees into part owners, each taking on a tiny share and growing the percentage of their ownership in proportion to their experience. Eventually, not only was this staff prepared to buy him out and lead the company into the future – they did it five years ahead of schedule, Hunsaker said.
But it required a process. “You can’t flip the switch and transfer that institutional knowledge to your leadership team overnight,” Hunsaker said. “It took me 12 years to do it.”
He stayed on for six months after the sale to help with the transition. Afterward, he parlayed his experience in succession planning to begin a second company – Ardent Group, a Chesterfield, Mo. consultancy specializing in preparing firms for the next ownership era.
That wasn’t in the original playbook. “My plan was to go find another company with a proven product but maybe a 1950s management style and no succession plan and do it again – kind of play ‘Flip That House,’ but only with a company,” he said. “I started calling all my architect friends who I had strong working relationships with at Counsilman-Hunsaker, and I told them what I had done... The response to me was, ‘Scot, I’m in so much trouble, because I’m 10 years older than you and I haven’t even started. What do I do?’”
After helping a handful of friends develop succession plans over the next year, the light came on.
Now, Ardent serves approximately 15 clients at any given time. These companies range in staff size from 15 to 500. And Hunsaker is preparing to bring in a second consultant.
Though the book applies to all types of businesses, it may hold particular interest to those in aquatics. The first half tells Hunsaker’s personal experience transitioning his company. Then the second half outlines his five keys to successful transition. He kept it under 90 pages, not including a few worksheets in the back.
“I was a business owner, so I wanted something that I could read on an airplane ride,” he said. “That was the criterion of success.”
As he sees it, the methodical success planning outlined in the book has become more relevant as the industry matures. Not only is it becoming more sophisticated, but many company founders are at the age to transition out.
“If we don’t figure out how to transfer this institutional knowledge and business savvy to the next team, what’s going to happen to our industry?” he said.