In the past few weeks I have had several small business owners who I’ve met with that were interested in creating self-sustainability in their business. They loved the idea that the freedom and independence which they wanted when they first started their business could be close at hand.
They, like most business owners, thought their business revenue needed to be $5 or $10 million annually in order to get there.
In a previous post titled Getting Beyond the “Survival Stage” of Growth in Your Business, I touched on the process by which you begin building systems which your business can operate on its own. Here I want to focus on how you actually do it.
First, the process is pretty simple:
- Do It
- Document It
- Test It
- Train It
- Delegate It
Sounds simple enough, so why do so many business owners struggle with completing it?
The Hit by a Bus Scenario
Anyone that owns a business has heard about the hit by a bus scenario at some point in time. The problem is we all deny it will ever happen to us. But, is that a realistic way to look at it?
Business succession planning is how you address the risk.
These are all good things, but be careful! If you’re focused just on achieving growth without a reason you could be just as miserable with a growing business as you are with a stagnant one!
As I presented in my previous post Succession Planning vs. Exit Planning Which Do You Use?, the primary goal of any succession plan is leadership transfer. So, you can imagine that things can get a little tricky.
One of the biggest reasons is that most succession plan checklists out there seem to focus on the transaction aspects of the transfer.
Often the terms succession planning and exit planning get used interchangeably. However, there is a definitive difference between the two. It’s important as a business owner that you understand the difference.
- Succession planning focuses on transferring the power or leadership of a company.
- Exit planning focus on the transfer wealth of a business.
Succession planning is really identifying, training, and transferring the leadership/management of a company to another person or team of people.