Do you have a succession plan in place for your business?
This important topic was the subject of a panel discussion at this year’s Multi-Unit Franchise Conference in Las Vegas. The panel was moderated by my friend Jesse Keyser, a Multi-Unit Franchisee at Sport Clips, who I thought did a great job of unpacking the issue and highlighting the importance of having a plan to transition a franchised business to the next generation.
As a business consultant and board member, I think this is one of the most important planning discussions a business owner can have - because what happens to the business when the founder retires, gets sick or dies? If you’re not planning ahead for that type of change, it’s going to cause a lot of disruption - especially when the shift occurs suddenly with no time to prepare.
I’ve seen it time and time again. If you don’t plan for your business succession, you’re not going to get what you want - guaranteed. As they say, “People don’t plan to fail, they fail to plan…” which is often very true in this area.
What it Means to Prepare for the Future
Building a succession plan is more than thinking through who the next CEO or owner will be, but planning for the future succession of every key role in the company. Beyond the four key leadership roles you may have today, for instance, what specific areas of expertise might become important as your business scales and grows? These are conversations you should be having - and plans you should be putting into place - well ahead of the time a plan is needed.
Beyond succession, there are additional conversations and plans your business should be having to mitigate and manage other types of risk, as well. These include:
- Continuity Planning: what will you do if an unexpected business interruption occurs due to a cyberattack, company scandal, or some other unexpected situation?
- Disaster Planning: what happens when your business is impacted by a natural disaster such as a tornado, earthquake or flood? How will the operations reset? Will employees have the option of working remotely? How will you recover?
All of these types of events can consume a great deal of time and energy. To keep the business moving and prevent as many disruptions as possible, advance planning for these situations is key.
How to Plan for the Future
If you’re not having these conversations in your business, and planning for future events, it’s likely that you don’t have a board of advisors. A good, responsible board of advisors or board of directors is talking about succession planning regularly - in fact, making sure your business has a plan for the future should be close to their number one priority.
If you don’t have a board, the time to put one together is now. You don’t want to wait until you need the plan to put it in place! There’s a lot of thinking and strategy involved - as well as financial aspects to consider - when building these plans, so it’s much better to have a plan before you need it.
And the bigger your business gets - the more important and complex this becomes.
If you’re interested in setting up a board, or making your current board more effective, I can help. This is the type of work I do for my clients and I’d be happy to help you, as well. Please reach out and let’s talk!