My hope is that I can grab your attention for a few minutes while we explore a topic that has had me curious for a long time. Studies continually show that small businesses typically do not have formal strategy / succession plans in place. Nothing has changed at all over the years as I remember reading an article about this alarming statistic well over 10 years ago. I am pretty passionate about you remaining in control of your wealth, your legacy and your desires to keep family relationships strong. Staying in control of these throughout your businesses life-cycle, right through to the transfer to the next set of owners is really important. All business owners would also share the same passions, as they would want the absolute best for their business and their family. So, what is really going on here? I have to start wondering;
Is family business succession planning in need of a disruption?
I believe so, and since every other business/ industry either has been, or will be soon get disrupted, it makes sense that it is time to disrupt the standard approaches used in succession planning. Business owners reading this might be happy to hear this. You are likely thinking about the “S” word and the “exit” word often enough so you might feel refreshed that someone is thinking about shaking things up – and I don’t mean simply changing words or catch phrases by using others terms such as; ” transition planning” or “strategy planning”. I know you are too smart to be taken by these slight changes. Believe me, I have used these for a while and they do not fool anyone (that was not my intent in using these words, by the way). Instead, a radical reboot is needed… so let’s go on this journey together!
My aim for this first article in a series is to encourage you to think about “what is next for you and your business” in an exciting and innovative way. So much so, that you might even be chomping at the bit to get things started (hey, I can dream can’t I, since this is my article : )
First, let’s understand what gets in the way of creating a plan?
Is there a knowledge gap, either in the typical processes, strategies and tactics used? By a simple google search along with searching through various social media feeds, we know this is not the case. Most of the technical processes required are well known and really do not take much time to create or implement. It is the creative arrays of structuring the plan that is unknown. Did you know that a succession plan can be as unique to you as a finger print? More to follow on this point in a future article so stay tuned.
Does the word “Plan” itself get in the way? Given the alarming stat that over 55% of families do not have a will, do not have trusted financial advisors that they meet with even infrequently, and many do not have even simple household budgets and financial targets to work toward, there is definitely something at work here. Having a “Plan” takes some adventure out of the game of business and life, I believe. And, if you are not well versed in creating plans, it is hard to surrender to someone else to help you create one. Where do you even start and is it too late anyway? And, besides, it is not a single event, it is a process that likely takes a lot of time and will be out of date as soon as it is created.
Is there a lack of time to pause in your busy days to think about planning for the future? I believe this does play a part too as everyone’s most precious resource is time. If interested, check out some useful tips in a previous article I wrote on this subject that might get you thinking about the importance of creating niches of time, just to pause and reflect.
Do your own unique traits as an entrepreneur get in the way? Traits such as the following list might be very familiar to you, and are the very traits that produce results, excellence and create a thriving business:
Acceptance of ambiguity
Desire to stay in control
Lets think about this for a moment. Am I suggesting that the very traits that have made your business a success over the years could be playing a role in impacting how well prepared you and your business will be for your eventual exit? Before you stop reading, please be patient with me. I have seen first hand, and I know you must have to heard stories of business owners that had involuntary exits forced upon them by one of the 5 d’s (death, disability, disagreement, divorce, debt). The knowledge of the 5 D’s and hearing personal stories of wealth erosion and family disharmony really shake you up and cause you to think a bit. However, to be blunt, you will not likely start calling up your advisory team to begin working on your plan, on a proactive basis.
Your hard-wiring of strengths and entrepreneurial instincts will not allow this – and that is OK. All the more reason we are in need of a disruption!
What parts of succession planning should be disrupted?
In a word, ‘everything’! At Your Strategy Navigator, we have been busy creating unique processes that put a twist on the traditional collaborative processes used when engaging owners and families on the softer sides of crafting a plan. However, what we have now realized is that most of these processes need to be turned on their head. And, please trust me when I say this – this is difficult for me to do as I am a process nut and love structure and organization! If I have still got your attention, please stick with me as we continue this journey into the next article of this series and we will uncover more specific components of the “disrupted succession plan” that will actually get you excited about diving into.