Death and taxes. The two are always lumped together as inevitable parts of life. So why, as business people, do we obsess over taxes and ignore the issue of death?
Nothing derails a small business faster, and more dramatically, than death. When a partner or key employee dies, or experiences a death in the family, the business suffers. No two ways about it.
The question is, is your brand strong enough to survive a devastating personal loss? Have you done any business succession planning at all?
My dentist lost his 3-year-old daughter in a drowning accident. How do you go back to drilling teeth after that?
My business partner lost her 14-year old son to a rare form of brain cancer. Jumping back into her role at work wasn’t exactly a priority.
Children. Siblings. Parents. Clients. Close friends. When you lose them, you also lose hard-fought momentum, motivation and money if you’re in business for yourself. And chances are, you won’t even care.
All those niggling managerial details that seemed like a high priority will almost certainly fall by the wayside. Clients and vendors are usually very forgiving in times like that, but if you don’t have some kind of contingency plan, you’re liable to experience yet another loss… of your business.
Personal loss is particularly hard on professional service businesses. When my mother died, I was physically ill for weeks. I was grief sick and unable to work.
Imagine a key attorney in a small law firm. A star architect. A senior executive recruiter with a big, fat rolodex. These key players are often the lifeblood of a company. Or as CFOs like to call them, “irreplacable assets.”
When those people go, the business goes with them. So what can you do to protect your business in case of a death?
Before you get too depressed to read on, here are some practical tips on small-business succession planning. It’s not about hiring the right law firm.
Successful business succession hinges on building your brand.
Once you’ve built an iconic brand, the business is much more likely to survive a traumatic loss. Sounds great, but how do you do that?
Make it about more than just money.
Great brands stand for something beyond business. There are values built into the brand that transcend time and personnel. Patagonia for instance… if Yvonne Chounard were to die in a climbing accident, the brand would endure. Not just because it’s a big company, but because they have a large clan of customers and employees who share the company’s core values.
Have a better hiring strategy.
Business succession planning involves hiring the right people to carry the torch. You want people who share your values and your vision, not your management style. Rather than hiring clones of yourself, find people smarter than yourself, with diverse backgrounds, experience and style. That way you’ll achieve some balance in the organization and it’ll be easier to fill a void, if something terrible happens.
Keep your story straight.
Too many companies get fixated on their logo and forget about the brand story they have to tell. Logos change and evolve, but the core brand story should always stay consistent.
Unfortunately, many C-level executives can’t articulate their brand story. Even Richard Branson has a hard time with the question, “what’s the Virgin brand about.” (It’s not just about Richard Branson) So before something bad happens, put your brand story down on paper. Hire someone to help you craft the story that doesn’t revolve around any one person. Then stick with it.
Build strong alliances.
Successful companies tend to have a large number of brand affiliations. They don’t operate in a vacuum. The more companies, people, brands and causes that you are affiliated with, the more support you’ll have in tough times. But don’t forget… all those affiliations need to be aligned with your brand. You don’t want just random alliances.
Devise a succession plan before you need it.
It’s kind of ironic… in order to get funding, start-ups have to include a slide about their exit strategy. And it’s usually pie in the sky stuff.
But many established businesses that are actually good targets for acquisitions, never even think about succession.
It’s one of those painful things that always gets pushed to the bottom of the to-do pile. But you need to make time for business succession planning. If you’re an owner, a manager, or just an employee, you need to know what would happen in the worst-case scenario.
For more on how to build an iconic brand, try this post.