Many business owners we talk to are so consumed with daily operational challenges that planning for a smooth ownership transition becomes another checkbox on a never-ending "to-do" list. Further, while many business owners know the importance of creating a solid succession plan, they view time spent planning for a successful ownership transfer as time that is not spent on growing the business.
But what if you could improve your revenue growth and profitability by creating and implementing a succession plan? We like to remind clients that part of a successful succession plan is putting in place processes to grow the business faster, more consistently and at a higher rate than their competitors. Therefore, we would like to share with you five areas we like to focus on when we are creating a succession plan.
1. Company Strategy: What is your story and how is it different from your competitors? Do your employees understand where your company is going and how they fit into your growth strategy?
2. Sales and Marketing: Do you have clearly defined processes for driving leads and converting prospects? Which client segment drives your revenue and are you effectively targeting them?
3. Operations: Does you company deliver on the sales promises it makes to prospective and current clients?
4. Financial: Do you produce reports that allow managers to accurately assess how well sales and marketing and operational initiatives/processes translate into financial results?
5. Human Resources: Are you able to attract and retain talented employees? Are roles clearly defined, performance metrics accurately monitored, and incentives properly awarded?
You know your business so well that the thought of change can be scary. However, if you give yourself a transition time of 2-3 years you can increase the value of your ownership stake, leave the buyer in a position to continue to successfully grow the company you built and provide your clients with a higher level of service - a win for the three most important parties in any ownership transfer.