There is one question many business owners would rather not answer: What happens to the business if I’m suddenly not available?
Not when you retire. Not when you finally decide to sell. Tomorrow.
For many successful businesses, the owner is the chief problem-solver, relationship-keeper, decision-maker, salesperson, historian, and firefighter. That can feel like a strength. After all, you built the business, but it can also be the business’s biggest vulnerability.
That is why succession planning deserves a different name. Instead of thinking of it as planning your exit, think of it as removing yourself as the single point of failure.
Why Do Owners Avoid It?
Succession planning is remarkably easy to postpone. The business is busy. There are customers to serve, employees to manage and problems that feel much more immediate.
There is also an emotional side. Thinking about succession can raise uncomfortable questions:
- Who could run this without me?
- Would my employees want to?
- Would my children?
- What is the business actually worth?
And perhaps the hardest question of all: Who am I if I’m no longer the person running it?
So succession planning gets filed under “someday.” The trouble is, someday is often too late.
Start Before You Want to Sell
The best succession planning may begin years before there is any intention to sell.
Why?
Because the same things that make a company easier to transfer also tend to make it a better business today.
A strong management team. Clear processes. Reliable financial information. Customer relationships that belong to the company rather than one individual. Employees who can make decisions. Systems that keep working when the owner takes a vacation.
Those things create options.
Maybe you eventually sell to an outside buyer. Maybe management takes over. Maybe the next generation steps in. Maybe you keep the business and simply work less.
Good succession planning does not force an exit.
It gives the owner choices.
Three Places to Begin
You do not need to know exactly how or when you will leave the business to start preparing it. Begin with three questions.
- What still depends entirely on me?
Make a list. Customer relationships, pricing decisions, approvals, technical knowledge, banking relationships, hiring, purchasing; anything that stops when you stop.
That list is your succession-planning starting point.
- Who is becoming capable of carrying more responsibility?
Succession requires people, not just paperwork. Look at the people around you and begin deliberately developing leadership capacity before you urgently need it.
- Could someone understand how this business works without asking me?
Document the important processes, agreements, responsibilities and information currently stored in the owner’s head.
Then test it. Take some time away. See what breaks.
Every question that comes back to you is useful information.
Succession planning does not begin with putting your business up for sale. It begins much earlier, with a deceptively simple goal:
Build a business that can thrive without you, even while you are still happily part of it.
That may ultimately be one of the most valuable things you ever do for your company, your employees and yourself. If you need help at any point during this process, reach out to us. paul@thebusinesstherapist.com
