Consider The Unknown And Have A Plan For The Future
A common theme emerged out of the 2019 Multi-Unit Franchising Conference in Las Vegas-growth. Although these are exciting times, growth brings challenges which generally boil down to a common theme. Resources.
In reflecting upon the Multi-Unit Franchising Conference, the general feeling is the future is bright and the entrepreneurial spirit is as strong as ever. The resourceful and creative nature of entrepreneurs is one of the core reasons why multi-unit franchising continues to grow and be more and more attractive to those wanting to make their personal mark in the world. Whether that be through emerging brands or franchisees who are taking on the risk to grow their business and provide opportunities for their family and communities. The risk is simply too high to not think about the future and put something in place to not only protect but empower your business to grow.
Succession planning isn’t instinctively associated with growth. Rather, it is associated more closely with planning for an end. Throughout this year’s conference, I heard many franchisee’s sharing that they are thinking about it but just aren’t there yet. Some shared that their kids are still young, or they themselves are young and of course one of the most popular is that they are not ready for the end.
It is easy to back-burner conversations and planning around succession because to be quite frank, it has received a bad rap. Perhaps it is because it is called succession. Regardless of the reason, engaging in succession planning long before looking to exit the business is critical to building a strong foundation for your future and the future of your family. This is especially true when you are looking to grow! The reason for this is simple. Proper succession planning helps you identify areas of challenge that may emerge, such as the theme we heard at the conference, how to properly apply resources.
If you are focused on growth and performance, it can appear difficult to split resources. People, time, and money are some of the things that need to be focused towards what is perceived to be an effort to plan for something way off in the distance. However, succession planning is just as much about tomorrow as it is next year, five years, or twenty years from now. What is not considered is what often plagues franchise owners and what can also derail their plans. The unexpected. We never like to say these things out loud but as a business owner, you have to consider those things that would have a detrimental impact on your business and family (or future family) if you have not put your plan in place. What if you were to become unexpectedly ill or incapacitated? Or what if you have children that one day will marry and want to bring their spouse into the business? Have you set the foundation to ensure that you, your family, and your franchise is protected?
Fundamentally, succession planning is about ensuring the sustainability of profits, which is a critical component to business value. To simplify it further, consider looking at the process from 3 points of view which would cover the potential, probable, and possible:
- ‘What if’ plan if you are out tomorrow, which I know is less fun and generally what makes people think of us as the crypt keeper
- What you would like to have happen in 3 to 5 years – grow, diversify, get out of day to day
- What you think you may want to have happen in the way off future – involve family, transfer to family, sell to key manager or third party, slow down at a certain age
As multi-unit franchisees, there are a lot of unknowns out there:
- What will the economy look like in a month, next quarter, or next year?
- How is technology going to change the industry, your business, and profits?
- What customer needs are you going to have to respond too, that you aren’t prepared to adjust
- What political policies or forces could come down the pipe?
- How will the next social media incident, weather, or security issue impact your community or safety of employees.
No one knows what the future holds with outside influences at play or even from the continuity of leadership in your organization and what that means for the welfare of your family, employees and their families, and the sustainability of profits. Approaching succession planning from 3 different perspectives allows you to address what needs to be done on your terms while ensuring those you care about are taken care of.
Often times, because a multi-unit franchisee is unsure what viable options are available in the future, no planning occurs. However, putting it off generally takes the chips off the table rather than keeping or adding chips. The planning process is fluid, what you think you may want to have happen today may change a few years from now. Interests, opportunities, and peoples’ minds change like the weather in Florida. Don’t let the unknown stop you from exploring and ensuring you have all available options at your figure tips.
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