Most small business owners I encounter do not have longevity as a focus. The two common reasons for this are:
- the business was setup as a lifestyle business or
- the entrepreneurs do not have the know-how to develop a solid succession plan
Working sustainability into your business strategy is a must (even if you have a lifestyle business – after all, there is no reason the next generation must not benefit from all your hard work). Below are some recommendations for getting started:
1. Commit to making longevity a key business focus
Mentally committing to making your business outlive you means that you will not take business decisions that threaten long-term goals. Get a board or advisory team that will hold you accountable to this goal.
2. Get help
This can come from the board or advisory team you have assembled. You can also get external help (consultants and experienced executives who have helped other companies create effective succession plans). For young businesses and startups, there are ways in which you can get this help at affordable rates.
3. Ensure compliance to the right business structures
The result of #2 above will be a well laid out plan with the right policies and internal controls to ensure success. The effectiveness of the succession plan will result from a concerted effort from the leadership team to adhere to and enforce succession plan regulations.
4. Build the right team
To me, this is the most important factor. A bad team in an excellently structured organization is like adulterated oil in a fine machine. Hire right and invest in building your team to lead the organization.