There are big, booming mistakes that small business owners (hopefully) don’t need to be reminded to avoid. For example, running out of working capital is bad. So is running out of customers. And anyone who needs to be advised that a great mobile-friendly website is essential has missed the virtual boat — because it’s been critical for about five years, and a best practice for about the last decade.
However, there are some lesser-known errors that small business owners make that don’t just lead to setbacks: they trigger shutdowns and selloffs. And according to the Law Office of Charles Huber, which has been filing business bankruptcy cases for more than 30 years, atop this list is neglecting to create a robust succession plan.
If you’re a small business owner and are at-risk of making this potentially catastrophic error, then here’s what you need to know and do:
Stop kicking the can.
Yes, you’re busy and don’t have time to create a succession plan. And you were busy five years ago, and a decade ago, too. Spot the pattern? Just in case you don’t, then I’ll spell it out for you: there will never come a day (or make that about a week) at work where you have nothing to do, and you can comfortably and cheerfully complete your succession plan. You’re always going to be busy. If you don’t make the time to do this, then it’s not going to happen.
Get expert advice.
A big reason that many small business owners avoid succession planning is because, well, they don’t quite know what the heck it is. Yes, generally they know that it’s about ensuring continuity when power and control changes hands. But what does this mean? How does it work? What are the best practices? What are the risks? It’s critical to get expert advice from a proven specialist, who will not only ask you the right questions, but help you answer them objectively and completely.
Don’t set it and forget it.
The surge of relief you feel after (finally) creating your small business’s succession plan will be inspiring, and your only regret will be that you didn’t do it sooner. However, don’t just file your plan away and forget that it exists. At least once a year, open it up and ensure that it’s still viable, realistic and optimal. Businesses are organic. They ebb and flow. Your succession plan may need an update — or possibly an overhaul — to ensure that it’s a functional asset instead of a dysfunctional liability.
The Bottom Line
Just as how individuals often reach retirement without a strategy to manage the next few decades, many small business owners fail to plan for day-to-day life after they leave the company — or at least, significantly dial down their involvement. By keeping the above tips in mind, you’ll be well on your way to avoiding little-known but fatal mistake — and ensuring that your small business thrives for decades and generations to come!
