By John Kaminski | OneAccord Partner/Managing Director
Do you care about the legacy of your company? If you do, you must have a succession plan.
For many, the plan is to sell the company someday. That’s reasonable, but it’s not a succession plan.
Assuming you want to harvest the maximum value for your company when you sell, do you realize your company is worth more without you in it? Buyers want to know the business will continue to perform after you are gone. Owner dependency is a major factor in business valuation.
Can you take a month off and feel comfortable that your business will perform as expected? Can you do that more than once a year? If so, it’s a pretty safe bet that you won’t take a dependency haircut on valuation.
Now some of you are having that OMG moment where you realize you now have to bet the farm by letting somebody else run the business or risk a lower valuation when selling. The truth is, there is another, safer way.
Rather than searching, hoping you find the right person and handing over the reins, a better solution is to identify the things that are your responsibility and craft a plan to train others to take them on so you can delegate as much as possible.
It may take a year or two to develop the team and structure that allows you as owner to step into a part-time, strategic leadership role. And if there are other individuals that the business is reliant on, you should build redundancy into those roles as well. You’ll end up working less and making more in the long run.
This is succession planning — and there are very few things you can do that will add greater value to your business.