We all need one. That is of course unless you plan to live forever in which case you can skip this post. For the rest of us a successor is someone we need and something we should think about.
I know that when I think about a successor it brings up all sorts of unpleasant thoughts. I bet the same is true for you. You might wonder how someone will ever be able to take over what you built? You might not really want to think about what it means to leave your business. Or you just might not want to spend the time on something that’s not going to happen for five years or more.
The truth is you and I don’t know when we’re going to need a successor. As my friend Rob Slee likes to say, “You’re one phone call away from disaster.” That was certainly true for me. One day I thought I was basically healthy and just felt rotten and the next day I’m in an Oncologist’s office trying to figure out will I have much life left.
I’m a micro-business and I didn’t have a successor in place. I did have a few people in the office who picked up the slack while I was in treatment. I did have systems in place that allowed the business to run more or less in a normal manner while I was away. These few systems helped save my business and allowed me to pick up the pieces after my cancer treatment.
Start with systems in your company
The first step is to start with systems that are easy for others to use. I believe the number one thing you can do to improve the value of your business is to make yourself operationally irrelevant. The easiest way to do this is to have systems in your company that are easy to use and easy to teach.
Not only will this help you move out of day-to-day operations, it’ll make your employees happier. I’ve found that we who are owners are fine with ambiguity in our work. My employees are not and I bet yours aren’t either. Our employees want to know what to do and how to do it. When you install great systems you make yourself operationally irrelevant and your business easier to run while you’re there.
Choose a successor early
This is especially true if you plan to transfer your business to family or your managers. When transferring your business it’s going to take you close to five years to complete a brain dump to that successor manager. You must find a way for your successor to have the information that’s rattling around in your brain.
Even better yet, while you’re doing your brain dump, write it down. Your company becomes more valuable when you document your processes. When you look at great companies like Disney or Starbucks they document what it takes to greet a guest or make a great latte. It’s the lack of ambiguity in delivering your product or service that makes a great experience repeatable.
Think about your transfer method well in advance of leaving your business
How you groom your successor will depend on what you want to do with your business. If you decide selling to a third party is your exit then you will want to make sure you have a way of tying key people to your business during the transfer. If you want to transfer to your family you’ll need to know who in your family will take over and if they’re ready yet. If you sell to your managers you’ll need to know who gets to own the business and who gets to stay as an employee.
Each transfer method has its own needs. Understanding what they are will make it easier to groom your successor. You don’t need to train them for everything, just the right things.
A start for you is to find out how salable your company is. We have a special report that will give you a 27 page personalized report on your business. To find out more and go to our Salability Index report, click on the button below.