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.
Succession planning is something too many small business owners think about too late! Many don’t even think about succession planning because they believe that they will just sell their and that’s the end of it.
However, even with the sale of a business succession planning is critical. The buyer will be your successor instead of a family member or a current manager in your business.
Do you hope to take a vacation some day and not worry if your business will still be there when you return? Most small business owners worry about as much as they do being able to cover their bills. The problem is not many are working at getting the business to this point or even know how!