Creating a Plan That Will Help Achieve the Dream
You need a plan to know where you're going. Whether you are hung up on a keep or sell decision, identifying a successor (children or key manager/partner), or continuing a partnership, you need a plan that provides flexibility while creating the necessary structure to maintain harmonious relationships that will support the business when you're no longer calling the shots.
If you attended the Multi-Unit Franchising Conference earlier this month in Las Vegas, you may have heard NFL Hall of Fame quarterback Steve Young assert that "you need a dream and a plan." The dream is where you're going and the plan is how to get there. Multi-unit franchisees sometimes don't have a clear dream of their business beyond the day to day involvement.
Additionally, if you happen to be a forward-thinking business owner, then you may have identified your dream but aren't sure whether or not it's realistic based on factors out of your control. The question then becomes, how do you provide the necessary governance to ensure business success without "ruling from the grave" and forcing a potentially unrealistic dream on the next generation?
Step One - Transactional Documentation - wills, trusts, buy-sells agreements, operating agreements, lease agreements - Do you know what they say? This is the "low hanging fruit" and unfortunately where multi-unit franchisees often begin and end the development of planning towards their dream. Critically important, the documentation can blow up your dream before it begins. However, after reviewing thousands of these documents, it is remarkable how often these documents are not it alignment with our clients' dreams. It is not because they are poorly drafted, it is often due to one of two reasons: the ultimate business dream was not clarified at the time they went to the attorney, or the documents were drafted so long ago that they do not reflect current circumstances. In either case, it is a very frustrating experience to find out that the thousands-of-dollars-worth of documentation needs to be rewritten. The goal here is simply to get it right the first time and revisit the plan every couple of years for updates.
Step Two - Clarify and Communicate Opportunities for Successors - Your people deserve to know the plan, and if you're not sure, it's okay to say I'm not sure yet but this is my dream! Surprise is the nemesis of achieving your dream. Assumptions and mismatched expectations can derail a business faster than your documentation. Before you step away, whether intentionally or unintentionally, your business family has made their assumptions about your plan, and it's not always favorable. The direct result is often poor business performance due to a lack of focus, and the loss of key people who assume that their future with you is limited. Understanding the dynamics of the next generation (family and managers), the upward ambitions of your key people, and how they interact with your dream is a critical and often overlooked step in the process. Engaging in this step will also provide much needed clarity to validate or invalidate your dream.
Step Three - Invest in Your People and Get out of the Way - After finding out who has the "fire in the belly" to potentially do what you do, let them know. Share with them your vision for helping them achieve their highest individual potential and that your expectations of them are higher than anyone else. Lay out your expectations in terms of education, performance, and leadership qualities so that there is no confusion about what it's going to take to get to the top. Highly driven people thrive on high benchmarks to reach - redefine their perception of success and give them the tools to get there. This however is one of the more challenging times for you as the business owner - you must be willing to stand by and allow them to make mistakes while relinquishing some operational control.
These three steps do not fully represent the complexity of the planning process, but they should minimally create the structure by which your family and business will succeed towards "the dream." You don't need to know all the answers to develop a plan, you only need to be willing to engage in the process. A failure to plan is a plan to fail.
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