Who takes over from you?By Nina Kaufman, Esq.
As Seen In …
Like Erma Bombeck famously said about housework, Succession planning expands to fill the time available. It can take years. Except … when it can’t.
Let me share with you stories of three business owners who had to create contingency plans in a hurry:
For lifestyle reasons, Kimberly Martinez had already chosen to live in Florida, away from the Cleveland headquarters of her company, Bonitas International. Now both parents concurrently fought their battles with cancer and she needed to step back. How will the company function if she’s totally ineffective?
Valerie Shondel was a full-time musician joining her father’s large-format printing business. Within a year, Valerie’s father died suddenly. He left SelectoFlash to her mother, who had no experience running the business. Valerie and her sisters were due to inherit from their mother. But local banks were nervous at the prospect of multiple owners. How will Valerie placate the banks and keep peace with her family members?
Kia Ricci needed a bond for a project. The Florida-licensed building contractor and founder of iCheckContractors.com, was hit with the demand for a continuity plan to obtain the bond. The bonding company wanted to know who could complete the project if anything happened to her. On such short notice, what are her options?
It’s important, but not urgent … until it’s urgent.
As business owners, we know at some point we’ll want to retire. Or get bored. Or someday, we’ll die. We know this.
Yet many act as if they’ll live forever. “What happens next?” is rarely top of mind.
And even when it is, you start to feel desperate when you look around to ask, “who’s my backup?” … and draw a complete blank. Or see only dismal options. (Like your inept brother-in-law. Or your irrational sister).
So how can you start smart in thinking about “who’s next in line?”:
- Visualize. What does your business look like if you are no longer part of it? This is the first step … and the one that creates the biggest hurdle for business owners.
- Mind the gap(s). If you’re out of the picture, who’s in it? Who picks up the slack? Where are the gaps on your team?
- Find and decide. Will new leadership will come from inside your company or outside? (Hint: start with inside). Does anyone have the talent and capacity? If not, what are your outside options?
- Groom your candidates … and the company. Set up a board. Encourage dialogue between current and future leadership so that all feel confident about the company’s future direction.
All three stories end well, and have options for you to consider.
Kimberly hired a temporary COO with a massive background in senior-level retail, originally on a consulting basis. The COO added exceptional value by repricing a product line and improving profit margins. This freed up cash resources to then hire the COO full-time.
Valerie bought the business from her mother. The banks rejoiced because they no longer faced the prospect of fractured ownership. Her mother received a regular income to maintain her standard of living. And, buying the business staved off future fights with siblings.
Kia found a local colleague she had worked with previously. She screened carefully to ensure he had the financial and workflow capacity to take over in the event of an emergency. The experience encouraged her to prepare for disasters and other business interruptions.
How will you put your company on a solid footing to function without you?
You deserve to be paid, protected, and prosperous. Kaufman Business Law can help get you there. Watch this short video to find out how.