Succession planning is no elephant in the room. Everyone is talking about why business owners should begin the process now if not sooner.
What’s more, many government agencies, financial advisors and insurance companies are offering checklists and worksheets to help owners make plans for the future of their operation.
Many businesspeople are talking about how important it is to have a succession plan. The trouble is, it is still just talk.
The most recent study by the Canadian Federation of Independent Business indicates that only 10 per cent of owners of small-and-medium-sized-enterprises have a formal, written succession plan; 38 per cent have an informal, unwritten plan, and the remaining 52 per cent do not have any succession plan at all. Clearly Canadian businesses are not prepared for the day their operation must change hands.
The reasons for putting a plan in place, even if that plan is later revised, are financially compelling.
“If you professionalize your business and put in place a team that can run it without you, then you have an entire business to sell,” Grant Robinson, director of the BDO SuccessCare Program, tells us in this issue’s feature “Making transitions.” In a highly competitive selling environment, it’s crucial to present your business in its best light to realize the best return possible.
There is another very real concern, says the Canadian Federation of Independent Businesses in its report, Building a Succession Plan: “Jobs are at risk. Without preparation, many business owners will be forced to sell at a discount to competitors or outside interests, with the associated risk of business closure and loss of jobs.”
Clearly there are many reasons to act. Planning for the sustainability of a business – for a large company or a small family concern – is an important task that should not be taken lightly nor left on someone else’s shoulders.
Don’t become paralyzed by the alarming facts but instead let them motivate you to do what needs to be done.
If you feel overwhelmed by the task of creating a plan and sticking with it, remember that safeguarding your business is no different from tackling the challenges you face every day. Your problem-solving and communication skills serve you well in finding practical, innovative solutions to everyday problems and they will help you through this important task – the one that keeps getting moved to the next day on your day calendar: “Start succession planning.”
I urge you to check out Robinson’s advice and the specific surveys and checklists he suggests can help you define your needs and put your situation in perspective. The purpose of these tools is to help you assess your situation without getting bogged down by your personal feelings.
A small-business owner I spoke with recently said of his 50-year-old business, “I worked so hard. I’m not just going to give it to anybody.” If only more people let that sentiment propel them to action.
If you have control-freak tendencies, now is the time to muster them and take that first step in the planning process. Whether it be filling out a survey at the CFIB website, calling a financial advisor or having “the talk” with your family, do it now.
But don’t forget to loosen the controls enough to share your plans, concerns and goals with others concerned in the business. Keeping the lines of communication open is so important.
For the good of the economy, your business, your family, and ultimately, your own peace of mind, don’t just talk about the elephant: move it right out of the room. Take fear out of the equation and start preserving the business you’ve worked so hard to build.
From the Editor: Spring 2014
Turn talk into action
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