Many small businesses are family owned businesses. Suppose you started your business years ago and you have built a profitable business for you and your family. Your children are now working in the business. What will happen when you exit? Many parents do not have a plan in place for when they exit the business.
There are number of steps that should be taken to prepare. These include legal, financial, and preparing the next generation to take over if they want to work in the business. In the first two areas you should work with an attorney and financial planner who understands tax laws. This is particularly important if you have other children who will not be working in the business.
Now whether you seek succession of your business to your children or whether you seek to exit through sale you need to develop a strategic business plan. Your plan will need organizational vision, values, and mission.
If your business has no vision, then it has no future. How do you see your business five to ten years from now? What business are you really in? Who are your real customers? If you know the answer to these questions and you include it in your vision you have taken an essential first step. You should then be clear on your values. Core values are vitally important to customers and employees. Next, you should follow through with goals and action plan for achieving those goals.
Your business plan should be clear cut and convincing to an outside party. This could include banks and other strategic partners. Ask yourself how you would fare if you had to present your business plan to Shark Tank.
You also need to develop your children for leadership roles. You are mistaken if you think that they will grow into it or that they will work it out themselves when the time comes. Put a leadership development process in place now. This process should include on the job challenging assignments as well as formal development. Such process will help you and them to discover their strengths and weaknesses and develop their skills. It will also help in the mutual discovery of who fits into what role. Remember, you need one president and CEO. A pre-conceived notion of who that would be may lead to disappointment or failure if a leadership process is not developed beforehand.
Many people spend more time planning a two-week vacation than they do the future of their business. You spent your career building your business. Make sure that it carries on as you intended.
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