We recently discussed five tips for a successful ownership transition. This week we will begin a series of five posts where we dig deeper into each of the five tips to provide questions and discussion topics for you to use in your own business.
Stratus' first key to growing your business for a successful ownership transfer is to build the right management team. A growing company needs to take advantage of the skills of multiple, complementary people in order to outpace its competition. Here are four areas for you to discuss as you build a management team that can grow your company's revenue and profit during and after your ownership transition.
1. What Are Your Strengths? As the owner of the business, it is important to be honest about your strengths. Are you good at building relationships? Perhaps you have created and implemented operational processes that are the envy of your competitors? Wherever your strengths lie, make sure that you build your management team so that your schedule allows you to spend the majority of your time focusing on your strengths.
2. What Are Your Weaknesses? As important as it is to understand your strengths, outlining your weaknesses is a must. If you are not strong with the financial side of the business, then your focus should be on hiring a qualified CFO who can make sure that your finances support your operational decisions. Having qualified people you trust in roles where you are weak creates less stress for you as the owner and allows for better decision making.
3. Are Your Current Challenges the Same As They Were When You Started the Business? Many business owners have great skills for the start-up phase of the business. However, as you assess your business today, are the skills that grew the company from day one until today the same skills that will be needed to run the company in the future? Perhaps you have multiple locations or have doubled the number of employees. Either way, your business is much different than it was on day one. Thinking about the skills needed to run a larger company will help you decide on the best people to be in leadership positions.
4. Are Management's Roles Clearly Defined? As a business owner, you want your business to succeed and therefore it can be difficult to step back and trust your employees to do their job. Sitting down and clearly defining what roles your management team needs (e.g., CEO, CFO, COO, etc.) and what responsibilities come with each role can help you to create a team that operates much more effectively. Remember that each management position should be derived from your strengths and weaknesses as an owner so the more honest you are with yourself the stronger your management team can become.
For many business owners, the hardest piece to get right is hiring the correct people. However, a growing business has few choices but to expand its workforce. Therefore, take time today to discuss these four questions with your trusted associate(s). Although it can be tough to get started, putting the right people in the right position can help your company succeed during and after your succession planning process.