Successful business owners know succession planning is about building strategies for today to create choice and take advantage of opportunities as they arise. Owners & leaders who have invested in succession planning already have options, know what they want, and are already implementing their growth strategies.
Growth is an example of transition because you are morphing your organization from today to where you want it to grow to tomorrow.
Whatever your strategy is for growth, internally or through acquisition, growth requires the ability to scale. Talent bench strength, leadership succession strategies, flexible and efficient processes, and a strategic plan are essential when developing a growth strategy.
If growth through acquisition is one of your strategies, consider the following to ensure you aren’t just buying a bigger job but are building value, creating revenue opportunities, and, ultimately, profit.
- Key financial considerations – First, you must know how much capital it will take for the acquisition. Will you be dependent on banks, or do you have unencumbered capital you can put into the business?
- Clear expectations on timelines – It’s normal to get excited and start making plans for the integration of the business. However, have clear expectations on timelines before you start celebrating.
- How you can manage or amortize debt – Do you have enough revenue or reserves so that when interest rates change, or profits go down, you can respond? Think in terms of what can go wrong and do an asset test to ensure you can survive.
And, key questions to consider include:
- How long will it take before you start making a return?
- Do you know the expected return on investment?
- Are there people who can help you manage the business?
- Do you have the energy and drive to see it through?
With succession planning – almost anything is possible. The strategy is your roadmap to create your vision. It allows you to navigate complexities, changes and overcome challenges to grow your business the way you choose.