17 KENTUCKY AUTO DEALER who plan to leave. Another area to focus on is technology. Owners who want to transfer their company will have an easier time doing so if they have up-to-date equipment and processes. • Do your best to anticipate possible crises. You can’t expect to see everything in advance, of course, but there is a lot you can see. Do you have enough financial reserve to get through a short-term drop in revenue? What if you or other key employees died or were hospitalized? Do you have people who could step up and take over daily operations? What if you lost an important, long-term client? Do you have enough business from other clients to survive? • The company should be bigger than one person, especially if that person is you. Cross-train several people within the company so other people are ready to fill in the gap if one or more key people are unavailable. This group is your management team. Write job descriptions and identify the characteristics and traits needed for each job. Assess how people are doing in their job, and help them fix gaps. Company leaders need to understand the business, but they also need to understand its history, risk-tolerance and values. • Invest in key employees and give them reasons to stay with the company. Let them have a voice in some of the decisions. Each generation has its strengths, but your strengths and theirs are probably not the same. The internet was launched April 30, 1993, almost three decades ago. Inevitably, people who came of age after 1993 are usually more comfortable with technology. • Retirement doesn’t have to mean quitting completely. Of those surveyed, 30% wanted to hand off leadership to others but continue to work for a while. About 7% still wanted to own the business but wanted to decrease their involvement. Start preparing the new owner as soon as you identify them. If you plan to sell your company, for whatever reason, it’s a good idea to hire the potential new owner first. That way, they get the same benefit they would have had if they’d been a member of the family. Sometimes it isn’t immediately clear whether a family member would like to take over the company. Maybe they are in school; maybe they’ve chosen a different career for at least a while. Giving them time to grow and decide isn’t bad. One attorney noted that the best successors often worked a few years outside the family business. What is the benefit of that? • The best choice might not be available for a while, especially if they are still growing up. Some people are worth waiting for, if at all possible. • The owner needs to be a person who communicates consistently and effectively and can build consensus. Employees who know the company is stable and doing well reward that with increased confidence in their work. • Experience gained in a different environment can give your successor an invaluable perspective that will benefit the company if they return. • Respect has to be earned, not given, and other employees are more likely to respect someone who proved they can succeed independently. It’s a problem if the new owner looks as though they bypassed gaining the necessary experience. Sometimes an unqualified family member wants to take over the family business, and the owner doesn’t want to tell them they aren’t a good fit. Yes, that’s a hard conversation. But if you don’t evaluate them fairly and hold them to the same standards as people outside the family, you are setting them up to fail. They may destroy the business, and if they do, everyone involved will have to develop a plan B. You don’t want that. How can you evaluate the next leader? The necessary skillset includes the following: • Courage and integrity both matter in any industry. Bad work and poor leadership will cost you repeat business. Also, employees who don’t respect their leaders are likely to move on as soon as possible. • The owner and other leaders within the company need to have the technical and interpersonal skills to make the right decisions. • Businesses are a team effort. The owner needs to support ongoing learning effectively and be a team-building coach. • Everyone in the company should ideally develop and share the same overall vision, but the owner has a particular responsibility to set optimal goals and help everyone accomplish them. • It’s a joke, but it’s true: change is a constant. The owner needs to be flexible about plans, or the company will flounder at some point. According to Family Business Review, which focuses on family businesses, more than 30% of family owned businesses get passed on to a second generation, 12% survive to the third generation, and 3% remain in business after the fourth generation. Of course, there are other kinds of multigenerational businesses, but succession planning increases your odds for success no matter who owns the business. That is why it is worth doing. INVEST IN KEY EMPLOYEES AND GIVE THEM REASONS TO STAY WITH THE COMPANY. LET THEM HAVE A VOICE IN SOME OF THE DECISIONS. EACH GENERATION HAS ITS STRENGTHS, BUT YOUR STRENGTHS AND THEIRS ARE PROBABLY NOT THE SAME.
RkJQdWJsaXNoZXIy MTIyNDg2OA==