How to ensure Sustainability of your SMME.
Let's focus our attention on sustainability of SMMEs businesses beyond the average fail time limit.
In most cases small businesses fail within the first 5 years, they just die out, others do however break beyond the time limit
…….but we’ve noticed especially with family businesses when the person that’s leading the business, which in most cases, its the father, so when the father dies then you find children begin to sell assets, and over time the business just collapses and crumbles.
- How then can you ensure business sustainability, for either a family business, where the person has been leading it is no more or in a position to control or continue leading the business?
- How can you ensure that your SMME is sustainable 10, 15years moving forward?
All right, so in our last post we already discussed, governance that helps you to think about tomorrow, it helps you to ensure that the business can stand even when you’re not there. We often ask entrepreneurs in business coaching, “if they were not in business for a month, or they needed to take leave for a month, or maybe if were not reachable on their phone and have no emails; would they be comfortable to say that the business will run smoothly,” most of them just laugh, because they won’t be comfortable. Okay! so governance is one. The other thing is what is the succession plan for your business?
What is Succession Planning?
Succession Planning.
This is a critical issue for all businesses. So if you are a SMME reading this today right, hand on heart right now. Question Time!
- What is your succession plan?
- Where is your succession plan and have you documented it?
- Who is your successor, in terms of your role in your organisation?
- Who understands the intricacies of how your business works?
Consequently, if your answer to any of these questions is ‘NO or I DON’T HAVE IT or Negative in any way or you are not quite sure,’ then this is a loop hole your urgently want to close and be prepared. If you are the only one who has the contact details for the customers or the bank and things like that, your succession plan is seriously flawed.
A succession planning is fundamental in terms of businesses surviving and existing beyond their founders. it should speak to the Next Generation, and determine whether or not they share the same vision?
Okay! sometimes business owners say this is a family business it must remain in the family, if those who are coming behind do not have any interest in running the business or it’s clear that they will take the business in direction that will mean it will cease to exist?
Do they Share the same vision as you? Succession Planning – Gain Control of Your Business: Ensure you can pass on the leadership role.
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In such a case what is the strategy there. You would much rather exit the business at some point or put up options to exit and those resources be reinvested elsewhere or in another venture that is of greater interest. So the biggest things that we would say are pertinent to the survival of businesses beyond their founders or the vision carriers; its succession planning and governance, the rest are around things like; Is the business competitive? Is the business accountable and transparent? etc.
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