It’s easy for business owners to become consumed with the demands of daily business operations. But this focus on the moment puts businesses at risk. Every leader must mitigate the risks associated with being the one in charge. A business’s true value is built upon its sustainability with or without its leader.
Ask yourself if you’re ready to hand over the keys to your business today. Perhaps you’ve already thought about what it will look like to hand over your business. You might even consider what a fabulous retirement might look like. But in order to bring your dreams to fruition, you need to commit the resources to planning a favorable transition. Right now.
Here are some strategies to begin succession planning.
Document Your Daily Operations and Procedures
Not everyone can be replaced. When some employees leave a business, they take with them vital institutional knowledge. When these key players fail to document that knowledge, they can cost you business and put your operations at risk. Mitigate that liability by ensuring each key player—owners, managers, and employees—documents their procedures and processes. Begin with key positions. This goes much farther than a mere job description. It should be an operating manual for each and every company role.
Review Strategies for Wealth Preservation
Consult regularly with your financial team members to assess your current financial position relative to your long and short-term goals. You must be financially knowledgeable at all times. Use strategy and growth advisors to help you pivot the business and exceed your wealth goals. Don’t forget to update your evaluations at least annually.
Nurture a Culture of Communication
Excellent communication is the key to knowledge sharing. Structure internal social exchanges and information sharing networks. Company meetings should always feature at least one key player sharing their role and how it serves the business. This ongoing process of education fosters open knowledge sharing. Reward employees for finding creative ways to educate one another. Dedicate at least an hour each week, per employee, for cross-training and education.
Host Quarterly Strategy Sessions
To become the next generation of leaders, up and comers need to understand your business plans now. Host quarterly strategy sessions to share KPIs, hard-won lessons, business plans, strategies, and other key details. These future leaders may one day be charged with navigating your business. Don’t keep secrets from them. Allow them to benefit from your wealth of knowledge. Sharing engages people, encouraging them to actively participate to help you achieve business goals.
Reward Excellent Execution
Employees go where they are rewarded, and work hard for recognition. Seek opportunities to reward their hard work, particularly when that work demonstrates a readiness to lead the business. This creates a business full of potential leaders, and that’s a business that’s ready for a healthy future.
Exit planning improves the value of your business both now and tomorrow. Bankers and investors will ask for your succession plan. Just as you planned your entry into the business, you must also plan your exit. This ensures your time, energy, and hard work will pay off even more than you imagined. Planning today can help you realize a profitable, rewarding tomorrow.