Business Performance Is A Key Factor for Succession Success
We hear it all the time. Multi-unit franchise owners don’t engage in succession planning because they are far from ready to plan for their exit. What we hear from you is that you are too focused on the current and future growth of your business to consider planning for your retirement. We hear that you are not ready to throw in the towel and move on to something else. Our response is always the same. Succession planning has more to do with ensuring the future growth and sustainability of your business and portfolio, than it does with just retirement.
Succession planning builds value for today and tomorrow. It establishes best practices in your franchise business to help you lead, communicate, navigate emotions, understand the Succession Matrix® factors, establish your goals for the future, and help you build the team to get you there. There are ten factors of our Succession Matrix® which impact each other, and in which one area can greatly impact the other. One of the ten key areas for building business value today, tomorrow, and achieving your future goals is business performance.
Establishing the value in your business involves more than looking at money and profits. You need to be mindful of your competition. You must be aware of how you treat and develop your people and ensure they are motivated to perform effectively and efficiently. You need to make sure your business is prepared for the future with respect to technology advances, industry innovations, market changes, contracting margins, and the changing demographic and make-up of your customers.
One tool we use when working with franchise owners is our Business Performance Checklist. In order to ensure you are focused on building value in your business and protecting that into the future you must:
- Determine business performance goals for your franchise
- Assess business performance relative to industry benchmarks, capital needs, cash flow needs
- Identify strategic planning priorities and your personal financial planning needs
- Initiate a review of your strategic plan to confirm the current business resources are in alignment with your desired business expectations
- Adjust resources and/or business performance expectations
- Establish a Business Performance Enhancement Team to include a facilitator (typically an outside advisor), owner/partners, accountant, and key managers
- Add to your Succession Planning Action Agenda the items for achieving business performance expectations
- Hold regular meetings with your Business Performance Enhancement Team to monitor progress on action agenda items
Business performance typically measures what has taken place over a period compared to industry benchmarks. These work to provide you information to determine if you are performing at, above, or below your competitors and the industry overall. However, these measures don’t really tell you how much value is being built in your business. You need to take into consideration all areas of your business and ensure you understand the importance of building this all into your succession planning goals.
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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