For almost all successful startup business owners, their success didn’t happen overnight. In fact, their entire business started out as a simple idea that came to them, and with years of hard work and dedication, it blossomed into the successful business it is today.
It’s the years of hard work and dedication that make business owners feel such an attachment to their businesses and rightfully so but it’s important that you know that in order for businesses to achieve success, it can’t be done alone solely by the business owner.
Lots of businesses might start out that way but that’s definitely not how it achieved success. As mentioned above, a business owner’s success all started out as an idea but in order for that idea to become a reality, it needs help from other business aspects. As the business owner, your time needs to be focused on running and operating the business… you don’t have time to send customers satisfaction surveys and to keep track of employee hours… you hire people to do that for you.
Delegating some of your business’ responsibilities is probably one of the hardest things to do, especially as a startup business owner. It’s a matter of possession and control. The Wall Street Journal actually states that during the startup years of a business, dictating how everything is done in your business can serve you very well but in having such control, it can turn you into a control freak.
In your mind, you worked too hard to just give certain responsibilities of your business to someone else… doing that would feel like you’re losing control of things but the reality was that you’re just delegating responsibilities.
Delegating responsibilities may sound bad but it’s really not as bad as it sounds. It’s really meant to help the business succeed. In order to do this, you have to first develop a team of leaders. And in order to do that, you, the business owner, must first act like a leader from day one.
This is important to do in general because you want your business to stay afloat if you need to go out of town for business or go on vacation, but more importantly, you want to have a strong team of leaders that know your business just as well as you do in the event you become incapacitated or die… In case something like that does happen, you want to have a succession plan in place for your business.
Planning For Your Business’ Future: Getting Your Succession Plan in Place
As a business owner, you first and foremost want to complete a power of attorney (POA). A POA is something you will need in your personal life but you’ll also want on for business purposes as well. A lot of times, people get confused on what a POA actually is… most people think it’s an actual attorney who represents you in a court of law. A POA is actually a legal document that appoints an agent to you to make decisions on your behalf in the event that you become incapacitated or die.
You will want to make your POA very detailed in the things they will be allowed and authorized to do and what they can’t. Your POA is something that’s temporary but necessary to have. The person you give this power to will be responsible for making decisions on your behalf until they’ve met all the responsibilities you’ve given them or until their services are no longer needed or deemed complete.
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As far as your business is concerned, if you don’t have a POA in place, your business decisions can be put in jeopardy. Let’s say that you’ve become incapacitated but there are legal documents that need to be signed and decisions that need to be made but if you can’t sign or make those decisions and you have put anyone in place to make thoe decisions for you, your business could come to a screeching halt.
With a succession plan for your business, this is an ongoing process that will continue on after your death. How will this go on? You will transfer ownership of your business. There’s five typical ways to do this:
- Co-Owner: sell your shares to a co-owner, if you have one
- Key employee: sell business to a key employee
- Company: sell your share back to the company and then distribute the remaining shares to the company owners
- Outside party: sell your business to an entrepreneur outside your business
- Heir: pass the business to a family member
The biggest thing to consider in your business succession plan is to make sure you’re handing the business over to someone or an entity that truly has your business’ best interests at heart and that plans to keep the business going.
If nothing more, make sure that whoever you’re transferring ownership to understands your company’s values and mission and that they handle the business in a way that abides by your wishes.