Steps to Help Control Your Future
As the saying goes, “the only certain things in life are death and taxes.” And while we can’t do much about the former, multi-unit franchisees can take steps to create more control over the future of their business. This is where succession planning comes in.
A succession plan is simply a roadmap outlining growth strategies, contingency plans, governance guidelines, leadership transitions, and strategic plans for the future. A well-executed succession plan can help a business maintain stability during difficult times and be a significant selling point when wanting to invest in new brands, looking for potential investors, or looking to sell the business to a third party.
Creditors, investors, potential buyers, or next-generation leaders will value the business based on the stability, the company’s intangible value, like the essential leadership and management involved (i.e., knowledge and experience), and any contributing family influences.
A succession plan helps a business maintain stability during difficult times, as the succession planning process builds strategies for potential, probable, and possible issues impacting long-term goals. When the ownership, leadership, and management know who will take over, it gives all current and potential stakeholders confidence in the business’s ongoing success. Additionally, a well-planned transition can help avoid conflict and confusion among employees and minimize any red tape that could impact the business’s operation.
2. Intangible Value
When potential buyers, investors, and franchisors see you have succession strategies established, they are more likely to invest in you because they know the business is stable and has a promising future. Additionally, a succession plan can help attract top talent to a company. Talented employees seek careers versus jobs, which requires an organization focused on creating opportunities now and into the future.
3. Leadership and Management
People are the backbone of any successful multi-unit franchisee business. The investment becomes even more attractive when potential buyers, franchisors, or investors see that your company has experienced and qualified leaders to fulfill operational objectives and serve customers. A well-thought-out succession plan will ensure that the right people are in place to lead, manage, and operate the company.
4. Contributing Family Dynamics
Formalities commonly do not exist or are lacking in family business environments. For example, we often see no clear direction about what each person is supposed to do, how to get it done, or what they are getting paid for, which opens the door for underperformance and distracting conflict. Lack of formalities generally results in enablement, inconsistent policies, nepotism, and toxic family/business interactions. No longer will people put up with toxic work environments or inconsistent accountability; they want more for their future. Without good talent, the business will suffer, impacting business value and your options for the future.
Too often, multi-unit franchisees believe they have “succession planning” all done because they have an estate plan and are working with a personal financial advisor. However, where estate planning and personal financial independence are important, they do not address critical factors essential to building business value and achieving long-term business goals. Successful multi-unit franchisees know succession planning creates growth strategies allowing them to diversify and develop a team to achieve their business vision.
Kendall Rawls knows and understands the challenges that impact the success of an entrepreneurial-owned business. Her unique perspective comes from her educational background and, more importantly, from firsthand experience as a second-generation family member of The Rawls Group - Business Succession Planners. For more information, visit www.rawlsgroup.com or email firstname.lastname@example.org.
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