Building Strategies For Growth With Succession Planning
Successful multi-unit franchisees know succession planning is much more than estate and exit, it’s also about building strategies for today to create choice and take advantage of opportunities towards your vision. Business owners who have invested in succession planning already have options, know what they want, and are already implementing their growth strategies. However, for multi-unit franchisee owners who have been misled to believe succession planning is just about the exit and retirement, you have some catching up to do.
You and your business will frequently face obstacles, forks in the road, or strategic gaps between one place and another while working towards your vision. Thriving in the face of predictable, possible, and probable issues is what we refer to as thriving through transition. Growth is an example of transition because you are morphing your organization from where it is today to where you want it to grow to tomorrow. New brands mean you and your organization are aligning with a new franchisor culture. New units mean you are going to have to orient new employees to your established culture. Successful multi-unit franchisees know that leaning into succession strategies ensures their existing organization's culture will continue to thrive and provide opportunities for their communities through their acquisition strategy.
In our last article, "Growth And Acquisition Are Part Of Succession Planning," we talked about the energy coming out of the Multi-Unit Franchising Conference. There was a lot of talk about growth and diversification. But, as we shared in the article, the reason for the excitement is that business growth strategies are essential components of succession planning.
Adding more units and brands requires the ability to scale. Talent, leadership strategies, and a strategic plan are essential when developing a growth strategy.
This energy and enthusiasm about growth through acquisition for multi-unit franchisee owners is just what the industry needs right now. We need to discuss strategies for growth through acquisition to ensure you aren't just buying a bigger job, but are building value and creating opportunities.
- Knowing the key financial considerations – First, you must know how much capital it will take for the acquisition. Will you be totally dependent on banks or do you have unencumbered capital you can put into the business.
- Having clear expectations on timelines – It's normal to get excited and start making plans for the integration of the business. But you need to have clear expectations on timelines before you start celebrating.
- Understanding how/if 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.
Once you have navigated these key questions and made the decision to move forward, then consider:
- 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?
Growth through acquisition is dependent on the goals and vision you have for your business. With proper planning - succession planning - most anything is possible. The plan is your roadmap that helps you build your strategies for growth. It allows you to navigate the complexities and changes and overcome challenges so you to grow your business the way you choose.
Succession planning is exit planning. Exit is transaction-based. Succession planning is transitional, focusing on strategies to successfully get you from Point A to Point B, C, and D. What steps are you taking to ensure you have strategies in place to take your business where you want it to go?
Kendall Rawls knows and understands the challenges that impact the success of an entrepreneurial-owned business. Her unique perspective comes not only from her educational background but, more importantly, from her experience as a second-generation family member employee of The Rawls Group - Business Succession Planners. For more information, visit www.rawlsgroup.com or email firstname.lastname@example.org.
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