Having a family business without a succession plan is like driving with a blindfold over your eyes. Not updating your succession plan is a similarly dangerous situation. You have no plan for mitigating the bumps or curves ahead on the road.
COVID-19 is a serious bump in the road that we’re all managing right now. In fact, it’s such a big bump that some even forget about plans for the future. You may be so busy spinning your tires to get out of this muddy hole in the road that you may forget to think about the legacy you hope to leave behind.
The truth is, now is the perfect time to revisit your legacy and succession plans to see if you want to make any changes.
What should you look for?
Profits are important. However, a business with no purpose other than to grow the bottom line will fail to inspire. Whether you see your company as a way to provide livelihoods to your employees, or the creator of innovative products that improve lives, you need a true second purpose and a plan to make an impact.
One way to show this other purpose is through corporate donations, volunteer days in which your staff is paid to serve a noble cause, or even through a foundation. What is the goal that inspires your company and drives everyone to work harder?
In today’s world of COVID-19, has this purpose changed? Or does it need to change? Look at the needs in your community and how you can best serve the needs. This will help you bring purpose and passion to your company that will help you grow far beyond what focusing only on profits ever could.
When discussing succession and legacy, it’s impossible to leave out the preparation of the next leader. Even if you feel that you have a long life ahead of you, it’s important to start the mentorship process now. You have an opportunity today to instill values in a future leader. However, no one knows what will come tomorrow. And despite the outcome, your future inheritors need to be financially prepared.
One common mistake when planning succession in a family business is to assume that the oldest child will be the successor. First, find out if the child even wants that role because sometimes they have entirely different goals and dreams! It’s also important to consider possible successor’s strengths, character, interests, and dreams. There are many viable and even fantastic options for choosing a successor for any business. Don’t be afraid to look around and find that person, even if it means going outside the family. First, define the profile of the ideal candidate and then determine if it fits a family member or not.
Have you updated your business’s 3 to 5-year plans since COVID-19? Does that plan allow for another pandemic? If you have a course upon which you’ve set your business, it will help you make it through future uncertainties. We all hope to live to help plan the future of our businesses, but we don’t have as much control over that as we’d like. So, it’s best to get ahead on your estate and tax planning so that your business plan and the preparation of your family’s future leaders have a strategy to follow, no matter what the future holds.
By updating and enhancing your succession plan, you can help ensure the success of your business and the wealth and wellbeing of your future inheritors far into the future!
Are you ready to get started? Check out Elaine King’s Return On Mission services which help you through the process of family governance and legacy & succession planning.
Elaine King offers personalized consulting and programs on planning succession and bringing your business legacy to life! Get in touch with her to organize your virtual session today.
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