Starting a business from scratch takes a lot of blood, sweat, and tears. Every minute of every hour of every day. And if the business survives, the time and effort an entrepreneur puts in at the beginning doesn’t decrease.
Sometimes, it can feel like building a business is just as challenging, or even more challenging, than starting a business.
I know firsthand. A business you’ve cared for and nurtured from startup to stable, growth-oriented enterprise is your baby. The thought of having to give up control over the company as a whole as well as individual operations, is hard to process.
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But just like with personal or family wealth that will need to be passed on, the long-term future of your business, including succession, is something that all entrepreneurs must consider, sooner or later.
Ultimately, the mark of a truly sustainable business is one that can not only be passed on to an internal or external successor, but one that can run efficiently and profitably on its own, with the right processes and people in place.
The ins and outs of succession planning
The first step in creating a self-sustaining business that can grow with or without you is to make succession planning a proactive business objective, as opposed to something to put off addressing until years down the line.
In line with this approach, rather than looking for potential successors when you’re nearing retirement, you should identify them early on in your business’s growth, training those candidates to manage all facets of the organization big and small.
These “rainmakers” for your firm could come from within your organization, or from outside. Regardless, you need to take the time to get to know them and their unique abilities so you can be truly confident that they can lead what you’ve built and believe in your founding mission.
The transition of these responsibilities can be carried out gradually as part of a structured succession plan, which your firm’s financial officer, controller, accountant or lawyer (who could themselves embody an entrepreneurial mindset) can assist you with putting together.
Enacting a succession plan does more than just facilitate the transition of responsibilities like operations oversight, business development, third-party relationships, and customer service—it can also ease or even eliminate the emotional resistance you may feel about giving up control.
Having a set succession plan in place and defined career paths for each team member helps gradually transition these responsibilities to ensure a smooth, seamless experience when you fully remove yourself from daily operations.
This strategic delegation can help you not only identify who on your team embodies the qualities and skills to eventually succeed you but also infuses sustainability into your business via:
- Back-office support. Migrating tasks like scheduling meetings, doing paperwork and managing other operations to those dedicated to these back-office tasks can give you more time to focus on nurturing high-value client relationships and other more important front-facing jobs.
- Planning support. You can train a team member to assist with analysis, client communication, data aggregation and similar tasks during planning meetings which can groom a potential successor while also giving you more time to focus on higher-level growth strategy.
- Relationship management. Simultaneously, you can train another team member to be in charge of customer engagement and retention which can free you up to spend more time on expanding your business’s capabilities or offerings.
Once you’ve mastered the art of delegation, you as the business leader can change your role from that of a manager or trainer to a coach or mentor. Mentoring your team encourages them to become more independent in their problem-solving and think critically about their role in achieving business objectives.
This directly fosters an ownership mindset and environment where your intervention isn’t needed quite so often and your team is motivated to exceed goals.
Laying the groundwork for sustainability
In addition to stepping back from day-to-day tasks and instead investing in your team’s growth, you can also pave the way for a sustainable business by leveraging innovative technology to create and implement efficient processes and workflows.
These processes should be part of a technology system designed to grow at scale with your business.
Furthermore, you should work with your team to integrate your marketing and business development initiatives. When you sync your holistic marketing plan that creates a steady pipeline of leads with the efforts of those following up on said leads and bringing in new opportunities, you are more effective in your goals.
Your marketing plan should also be multi-channel and driven by a diverse mix of lead-generation strategies for identifying and attracting the right clients, while using data and audience-specialized messaging.
Finally, you should look to increase long-term net profitability by optimizing and expanding the service offerings within your business.
For example, consider buying a smaller company that produces a complementary product or service, acquiring a business that you can integrate into your model, or resolving challenges for team members or customers.
All of these tips can help you build your business into a profitable enterprise that grows steadily at scale while retaining its core values and thrives with or without your daily oversight.
When you follow the right processes, you can be proud of what you’ve created, maintain confidence in your successor(s), and not feel like you’ve abandoned something very special to you and your family.
Jason L Smith’s new book (out today) is The Rainmaker Multiplier: How to Create a Self-Sustaining, Scalable Financial Planning Business.
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