As a young entrepreneur, you’re probably filled to the brim with confidence, caught up in the day-to-day running of your business with little thought to the inevitable end. As an older, experienced business owner, you may have planned for succession some time ago, your plans becoming more obsolete and forgotten by the day – perhaps you have held back from even starting on these plans, immobilized by a fear of moving on.
All these states are totally natural reactions to both running a business and the passing of time. Yet they do not negate the fact that a business without a succession plan is like a tire with a slow leak – by the time it’s totally flat, the whole thing’s buggered. Once that’s happened, no amount of strategy or advice can fix it.
Business Succession Systems
Do you want to see your company continuing to thrive, even once you leave? Any rational being with fully functional cognitive capabilities would answer in the affirmative. Excluding embittered burnouts who want nothing more than to be the centre of attention, holding their business together with their own blood, sweat and (mostly) tears, we are going to assume that the remainder of you reading this are interested in ensuring your company’s future success. This is not only possible, but exceedingly probable, IF your succession plan accounts for everything well in advance, and is continually updated to stay relevant in this wild, rapidly changing business landscape. Sounds a bit overwhelming? That is where our management consulting services come in handy.
Why plan at all?
Picture this: you’re in the market for a new business, scouring the possibilities, seeing where potential lies. There is a company you really like the look of – you’ve kept tabs on it over the years, watched it blossom from a humble startup into a corporate giant.
From your years of diligent observation, you have ascertained that the CEO is well past retirement age, not as effective a businessman as he once was. And yet there is no mention of the company being sold, passed down, or merging.
Due to your network of connections, you know for a fact this company’s clients are dissatisfied with this lack of foresight. Some clients leave to have their needs met elsewhere. Internally, rifts are created between employees as some are left totally clientless. Gradually, they begin to leave, at first individually and then en masse.
Suddenly, the CEO reaches a point where he is physically incapable of running the ragged remainder of this company. He is forced to sell it for a fraction of what it was once worth, and must be content with undervalued, meagre offerings because he didn’t have a business succession plan!
This may seem alarmist to the uninitiated, but if anything, the rate at which things like this happen is alarming. Every day, careless business owners throw caution to the wind and put off making a succession plan, endangering shareholders, employees, clientele, and their families.
Whether selling your business to fund your retirement, to give yourself a change of pace or to pass the torch to the younger and more capable, you need a plan to make this happen. The transferral of a business is rarely a seamless process, and yet proper planning will make it so. This is not a miracle. Like anything good in this life, it is a result of smart planning and good ol’ fashioned hard work.
Things to consider
Outlined below are some of what any business owner should be considering when planning for the transferral of their business – this list is not extensive, but is a good start to get you thinking, so that when you come to me for coaching, your thoughts are productive and not merely hopeless expressions of total confusion. Therefore, some things you should keep in mind are –
Timeframe – when do you want your plan to be complete by, and when do you want it implemented
Keeping on top of your accounting – if your books are in order, it is far easier for prospective clients to know exactly the financial status of your business, and this will of course lead to a higher asking price than if your books were cooked, or improperly maintained through other less common but equally nefarious methods
Know inside and out the extent to which your assets and liabilities balance or outweigh each other – this will provide invaluable data with which to value your business
Who exactly is your business being succeeded to? If it is family, you must get them on board and up to speed asap. The earlier the better, so that they can get to grips with your business and avoid the pitfalls of nepotism that inexperienced promotion often causes
Communication – who else needs to know about this plan? For reasons I’m sure you are aware of, letting those involved know all the relevant details will greatly increase the ease of transition – no one likes an unexpected surprise, least of all in the arenas of business & work life. To keep your business in an optimum state of efficiency with maximized employee and client satisfaction, detail your plan to all who need know, and even those on the periphery of the process, so that everyone is working towards a common goal and not a mess of hidden agendas or confused, irrelevant directives
No matter whether you’re crashing through the waves of life at 35 knots or stuck listlessly in the doldrums, it is always important to have plans in place that account for every eventuality. That is why, at Think Differently, we are always ready to assist you in constructing your business succession plan so that the transferal of your business is seamless and productive.
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