Why do so many small business owners wait
until it’s too late to plan for succession and transition?
By Jamie Sorrs, Marketing Director for ChenMark
According to a recent survey, 96 percent of small business owners agree that it’s important to have an exit plan, yet 58 percent of those same owners have no transition or succession plan in place. To compound this issue, many owners have the majority of their net worth tied up in their business. With no clear retirement/transition/succession plan, owners are all too often forced to be reactive when it comes time to exit, which risks a suboptimal outcome for them, their families, their employees and for the company legacy that they’ve worked so hard to build over the years.
It should come as no surprise that those who start planning for transition early on tend to be the best prepared when it comes to retirement. The problem is, as a small business owner can relate, it’s all too easy to kick a project down to the off season to-do list, especially when it seems years or even decades away. The issue here is that even when a transition may feel as if it is in the distant future, you never know when a sudden illness, life-changing event or global pandemic can advance that timeline from years away to months or weeks.
With all this in mind, the time to start planning for transition is now, so we’ve laid out five steps you can take today to set yourself up for the best possible transition outcome in the future. Thus prioritizing your family, staff and your goals, including a well-earned retirement.
5 Tips for preparing for transition
- Get your books in order
The better you understand your financial and operational data, the more likely you are to succeed. If you are organized and disciplined about collection and control, the information your company generates can tell you where to invest, where to look for mistakes and how to correct them and where you can and should be spending your time as a leader.
- Understand cost & value
In any business, profit isn’t just a measure of success for a certain period; it also represents capital that can be reinvested to finance future growth and expansion. Every additional dollar in expenses has a significant opportunity cost, and it is important that your company receives good value for every dollar spent. The bottom line: prioritize saving, but don’t be cheap.
- Sweat The small stuff
One of our core values is to chase better, but this doesn’t mean pursuing some sort of silver bullet. Instead, it’s about believing that success in small business is the sum of many small decisions made well, every day. As Admiral William McRaven has said, “If you can’t do the little things right, you will never do the big things right.”
- Focus on the full employee experience
Employees are the most important part of any business. Therefore, it is essential for every successful company to have a defined strategy and approach for every aspect of the employee experience. This includes addressing a new candidate, onboarding and training and reviews and incentives. Every step is an opportunity to differentiate your company from the competition and to keep your employees from going to work for them.
- Make mistakes, then fix them
Make mistakes, own them, correct them and share what you’ve learned. Like it or not, we all make mistakes, but it's the ability to turn these into a learning opportunity for you and your team, instead of just rejecting them, that can make a lasting difference.
ABOUT
Jamie Storrs is the marketing director at Chenmark, a holding company in the landscape and lawn care industry that owns and operates landscape firms from Maine to Cape Cod.
Phone: (207) 221– 2176
www.chenmark.com