Beverlee Rasmussen CEC PCC What will happen to your business when you don’t want to run it anymore? Do you have a small business succession plan?
Keep, sell or hand down. These are your options as the owner of a systematized business.
Think of small business succession planning as advanced systems-building. Imagine every aspect of your business without you…forever. It’s hard to imagine, I know. I sold my travel agency for a multiple six-figure payday only because I was able to imagine my agency without me. And I did what was necessary to make it run without me even while I still owned it.
Let’s look at what decisions you need to make to free you from your business—and it from you. Think about what your own answers to these questions would be:
Who is your successor?
- When it comes to your leadership role in your business, who is your successor?
- What attributes must your successor (or successors) have?
- How will you train your successor to take over your role?
Are your finances up to date?
- What are your current financial strengths and challenges?
- What steps must you take to overcome those challenges prior to stepping away from your business?
- Is your business profitable? If not, what decisions do you need to make to ensure consistent profitability and earnings growth?
- Are you up to date on all tax payments? If not, what is your plan to “catch up”?
Are your operations easy to follow?
- Do you have a complete operations manual with multiple, easily accessible digital and printed copies?
- Do you have a business plan, budgets and projections with multiple, easily accessible digital and printed copies?
- Do you have long-term agreements with trustworthy vendors with multiple, easily accessible digital and printed copies of each contract?
- Are the mechanics for the purchase or sale of shares in the business in place? These include a shared vision statement, share agreements and an asset inventory.
Does your team know their roles and responsibilities during the transition?
- Do you have a detailed organization chart so that every manager, employee and contractor knows what is expected of them?
- Does your small business succession plan include clear, fair, legally binding position agreements with easily accessible digital and printed copies of each agreement?
- Do key company stakeholders know their role during and after the transition of business ownership?
How are you maintaining your customer relations during this transition?
- What are your plans to maintain customer relationships?
- Do you have communication systems (e.g., email templates) to inform your client about your succession plan and update them throughout the transition?
- Do you have an ongoing short- and long-term marketing plan to ensure sales success after your departure?
Until next time, enjoy your Entrepreneurial Journey!
Learn the 4 selling traps of small business succession planning
Buy a copy of the Small Business Field Guide! Includes a full chapter on succession planning.
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